Human Rights Act 1998: The Monarchy

Lord Lamont of Lerwick: asked Her Majesty's Government:
	Whether the Human Rights Act 1998 alters existing legislation concerning primogeniture, the succession to the Crown and the prohibition on the Monarch marrying a Roman Catholic.

Baroness Ashton of Upholland: My Lords, the Human Rights Act 1998 has no effect on the rules that govern the succession to the Crown.

Lord Lamont of Lerwick: My Lords, I thank the noble Baroness for that reply. Is it not clear that the discriminatory provisions in our statute law against—to use the word of the legislation—"Papists", or the descendants of the Electors of Hanover, or elder daughters, could not possibly be judged by any court to be compatible with the Human Rights Act precisely because they are so explicit? Is not the argument that has been used previously by the noble and learned Lord the Lord Chancellor—that these provisions have only restricted application and therefore are not discriminatory— seriously weakened by recent events where the Government had to rush out a Statement at the last moment, drawing on the Human Rights Act, in order to sanction a Royal marriage that otherwise would have been impossible? Would it not be more satisfactory for the Government to anticipate future events?

Baroness Ashton of Upholland: My Lords, I disagree with the noble Lord. There is a difference between applying the Human Rights Act to, for example, new legislation and applying it to that which is part of the backbone of our constitutional arrangements. The Government did not "rush out" anything. In looking at the Marriage Act 1949, the Government were very clear to engage Section 3 of the Human Rights Act, which provides that when looking at legislation that may have any ambiguity, one is conscious of the rights within the Human Rights Act—in this case, rights 12 and 14.

Lord Tebbit: My Lords, is the noble Baroness saying that the Human Rights Act simply cannot apply to the Royal Family and the rules of the inheritance of the Throne? Or is she saying that it does not affect it in the sense that the present rules are compatible with the Human Rights Act?

Baroness Ashton of Upholland: My Lords, I am saying that the succession Act of 1701 is absolutely clear; there is no ambiguity in law about what is implied there. The noble Lord, Lord Lamont, referred to the way in which my noble and learned friend the Lord Chancellor had used the Human Rights Act in the interpretation of the Marriage Act 1949, where there might be some ambiguity. In this particular context, the succession Act is absolutely clear. Therefore it does not apply in that context.

Lord Lester of Herne Hill: My Lords, does the Minister agree that if one were to use the Human Rights Act to repeal the discriminatory provisions clearly expressed in the Act of Settlement, it would undermine the doctrine of parliamentary sovereignty? Does she further agree that it is very curious for Conservatives in the House to rely upon the Human Rights Act in the way which I think is suggested, but at the same time to suggest scrapping it, thereby leaving British citizens without British courts giving British remedies for British problems, leaving only the European Court of Human Rights—which I am sure many on the Conservative Benches would rather not hear about at all? Does the Minister agree that that is a very bizarre posture for the Conservatives to take?

Baroness Ashton of Upholland: My Lords, "bizarre" probably is the right word. As the noble Lord knows well, Parliament is not a public authority in the context of the Human Rights Act. However, I believe that the Human Rights Act is among the most important pieces of legislation that any government have introduced since the achievement of universal suffrage. It enshrines the notions of respect, equality and fairness and it protects some of the most vulnerable members of our society. I hope that all noble Lords would agree that that is of critical importance.

Lord Campbell of Alloway: My Lords, does the noble Baroness agree that the Human Rights Act has nothing whatever to do with our constitutional arrangements affecting the succession to the Monarchy, and that if such were sought to be exercised we should immediately opt out?

Baroness Ashton of Upholland: My Lords, the Human Rights Act says that there needs to be a victim in order to mount a challenge under it. As I can see no victim within this context, one could argue that it is not engaged in that way. Considering the benefits that the Human Rights Act brings to the citizens of this country, I can see absolutely no reason ever to opt out of it.

Lord Alton of Liverpool: My Lords, does the Minister nevertheless agree that to have a provision on our statute books that seems to challenge the loyalty of one specific section of the community in this country, one specific denomination, is itself something that should be addressed? The Prime Minister was right when he said at the beginning of the previous Parliament that this was an issue that he wanted to see addressed and changed. The Bill that has been introduced in another place by Mr Edward Leigh would be a welcome addition to our statute books. Will the Minister respond to that Bill?

Baroness Ashton of Upholland: My Lords, I refer the noble Lord, Lord Alton, to a debate on these very issues that took place not long ago in your Lordships' House, led by my noble friend Lord Dubs, and indeed to the contributions made by two right reverend Prelates about the critical importance of the role of the Sovereign in relation to the Church of England. I shall not take up your Lordships' time now, but I should say to the noble Lord, Lord Alton, that a cursory look at the Hansard record of that debate will demonstrate how important and, dare I say, difficult these issues are in ensuring that we continue in the way that we have since the Acts were introduced.

Lord Henley: My Lords, my noble friend Lord Lamont referred to the Government anticipating future events. When introducing the Human Rights Act, did they anticipate that it might, for example, prevent schoolteachers having a dress code in schools; allow Travellers to ride roughshod over planning controls; or even lead to a state where the Government would effectively abolish habeas corpus?

Baroness Ashton of Upholland: My Lords, sometimes we do not always look at the issues that have been raised in quite the right way. To take the example of Travellers put forward by the noble Lord, Lord Henley, it is very clear, as he knows well, that in 1994 the Conservative government overturned a very important rule which enabled Travellers to find settled sites. Any noble Lord who has looked at the issue of, for example, educational under-achievement will know that Traveller children have the lowest educational achievement of any group in our society. Finding ways in which all of our children and all of our communities can live together is very important. That is not putting one person's rights above another's; it is recognising all human rights and recognising the importance to our society of doing so. In each of the examples that the noble Lord gave, I could explain to him how important it is that we have this valuable Human Rights Act.

The Lord Bishop of Chester: My Lords, I have no problem with ending the presumption that the male heir takes precedence to the Throne. That is a particular issue. On the apparent discrimination against the Roman Catholic Church, does the Minister join me in hoping that future ecumenical developments might ease these problems, given that at present the Church of England has no problem with the Sovereign being simultaneously a member of the Church of Scotland whenever she exercises her responsibilities north of the Border? Does she also join me in hoping that at some future date, ecumenical developments will ease some of the underlying problems to which the noble Lord, Lord Alton, has drawn attention?

Baroness Ashton of Upholland: My Lords, I could not agree more with the right reverend Prelate that the ecumenical movement, with which I was involved in my teenage years in the north-west, is of critical importance. The work that has been done in Liverpool in the past 30 years in bringing together the Roman Catholic Church and the Church of England has been extremely important, as it was in my youth. It is very important that we remember that we are a country of a variety of faiths and of a variety of denominations within faiths. The more that faiths can work together harmoniously, the more we will have the society for which we all strive.

Avian Flu

Baroness Masham of Ilton: My Lords, I beg leave to ask the Question standing in my name on the Order Paper. In doing so, I declare that I have a small flock of domestic chickens.
	The Question was as follows:
	To ask Her Majesty's Government whether poultry in the United Kingdom are at risk from avian influenza (bird flu) and, if so, what steps they are taking to protect them.

Lord Whitty: My Lords, EU rules prevent imports of birds and avian products which might transmit avian influenza from affected countries. Hence our risk analysis concludes that the likelihood of importing the virus in this way is insignificant. There remains, however, a low risk that the virus might be introduced by migrating birds although there are no direct migration routes from the affected countries in south Asia. The Government have a contingency plan for dealing with the disease in this country.

Baroness Masham of Ilton: My Lords, I thank the Minister for that helpful reply. Is he aware that H5N1 is a very complex virus? Ducks and wild birds can become carriers without being ill, but domestic fowl can become infected. Is not the real danger that this virus might spread from bird to human and then—the worst scenario—from human to human?

Lord Whitty: Yes, my Lords; all those contingencies might happen, but there is a relatively low probability of them happening as migratory birds do not migrate from south Asia to here. That is where the particularly virulent form of the disease—H5N1—is at present; it is much more virulent than other types. The disease could, however, be brought by migrating birds from Siberia, moving east-west, which crossed with the north-south migration. However, the probability of that happening is relatively low.
	As far as concerns humans, there is not an established widespread pattern of humans catching this strain of avian flu. However, we are looking at the information coming from Vietnam and elsewhere. The Department of Health also has a contingency plan for covering any human epidemic.

Baroness Trumpington: My Lords, am I not right in thinking that we import feathers from China and other far eastern countries? How do we know that this disease is not transportable via feathers?

Lord Whitty: My Lords, feathers are still imported. There is no danger that clean feathers could transport the disease; if there were blood and faeces on the feathers, they would not be imported as they would not meet the standards set down. That has been made clear to those who are enforcing the regulations.

Lord Turnberg: My Lords, will my noble friend reassure us that there is close co-ordination between the efforts of Defra and those of the Health Protection Agency which is responsible for human protection in this area?

Lord Whitty: My Lords, there has been very close co-operation between the various enforcement agencies. Only a few weeks ago there was a meeting between the HSE, the Health Protection Agency, the Department of Health and Defra to ensure that we were covering all angles regarding the danger to fowl and to humans.

Lord Livsey of Talgarth: Will the Minister confirm that the import of poultry is banned from China specifically, because that is where the majority of the feathers, which do pose a threat, come from? It is known that the virus has crossed to humans and that a number of people have died in Vietnam as a result. Will the Minister ensure that the import of feathers is banned, because there is a risk of the disease being imported into the UK?

Lord Whitty: My Lords, there is not really a risk of clean feathers transporting the disease. The effect of checking whether the feathers are clean means that the risk is very low. It is extremely unlikely that the disease could be introduced by feathers. It is much more important that we concentrate on the real channels of possible infection, which is why there is a ban on poultry and poultry products from China and from the other countries in which the disease has broken out.

Lord Walton of Detchant: My Lords, in the light of the question of the noble Lord, Lord Turnberg, are the Government satisfied that enough is known about the constitution of this virus for one to be confident that the antiviral agent which the Government are stockpiling will be effective against it? Secondly, is there any evidence that work is proceeding on the development of a vaccine against this particular strain of influenza virus?

Lord Whitty: My Lords, the priority of the health authorities is developing and, as the noble Lord says, stockpiling the antiviral drugs. They will be effective against all known strains of avian flu.
	The question of a vaccine, however, is much more complicated. The direct transfer of this particular strain into humans is both unlikely and relatively small. The outbreaks in Vietnam and China are limited to families who are involved with poultry. Nevertheless, there is a danger of that happening, but there is also the more dangerous possibility of the virus translating into a different virus, either in pigs or in humans, for which it is difficult to predict how to develop a vaccine. Work is in progress on a vaccine, but the first line of defence for any human outbreak would be antiviral drugs.

Baroness Oppenheim-Barnes: My Lords, is the Minister aware that some supermarket chains are importing large numbers of chickens from Brazil and selling them under names that sound like British farmhouse products? Is it not about time that the country of origin had to be shown, certainly in the case of potentially dangerous foods, so that consumers are aware of where the products are coming from?

Lord Whitty: My Lords, I should point out that there is no known health danger either to animals or humans from imports of poultry from Brazil.
	Labelling arrangements for imported goods into the EU are covered by EU rules, and it is the British Government's view, which we are pursuing with some support in the rest of Europe, that the labelling requirements should be tightened up. That will be addressed at European level in the next few months.

Lord Davies of Coity: My Lords, I am comforted by the way my noble friend has comprehensively responded to each of the questions, and I appreciate that the risk is likely to be low.

Noble Lords: Question!

Lord Davies of Coity: My Lords, precisely what measures are the Government currently taking to ensure that that risk will become absolutely nil?

Lord Whitty: My Lords, I could never reassure the House or my noble friend that the risk is nil. However, the combination of the bans on imports of poultry and poultry products and our contingency plans for poultry disease and for health disease give us maximum assurance that there is a low risk that the disease will get into the country, and a very low risk that it would spread if by chance it did get in. I hope that is sufficient reassurance, even if it is not absolute.

Nepal

The Earl of Sandwich: asked Her Majesty's Government:
	What steps they are taking to help to restore constitutional government in Nepal.

Baroness Symons of Vernham Dean: My Lords, the United Kingdom is working with European Union partners to seek the return of constitutional government in Nepal. We have raised our concerns over the King's takeover of power, both publicly and privately, as we believe it will increase the risk of instability, undermine democracy and cause the already poor human rights situation to deteriorate further. As a result of the King's actions we temporarily recalled our ambassador, and we have withdrawn plans to gift a further tranche of military equipment to Nepal.

The Earl of Sandwich: My Lords, after several weeks of a state of emergency, this is a serious and critical time for the Nepalese people, with senior opposition leaders such as Mr Madhav Nepal and Mr Koirala still detained, along with hundreds of others all over the country.
	Does the Minister agree that the monarchy is the most important force for stability at this time, against the Maoist threat in particular? Is she satisfied, therefore, that our Government are doing the maximum possible to restore their government to constitutional democracy?

Baroness Symons of Vernham Dean: My Lords, I acknowledge that this is a difficult situation. I believe the British Government engaged quickly on this point, calling in the Nepalese ambassador to London, seeking and gaining a meeting with the King at the point when the state of emergency was declared, and working with our EU partners.
	A number of people have been detained, as the noble Earl points out. Because of the media and other restrictions, it is difficult to be aware of all those who have been arrested or detained, especially those outside Kathmandu. However, both in the private exchanges we have had and in our public exchanges, we have been clear that the King should be restoring multi-party democracy, that he should undo the measures taken under the state of emergency and restore democratic freedoms, and that he should be safeguarding human rights and human rights organisations. We shall also take up this issue at the UN Commission on Human Rights, where we are working with partners on what should be said about the current state of affairs.

Lord Howell of Guildford: My Lords, however much we all want democracy to return to Nepal, does the Minister nevertheless agree that the so-called democratic government who have been removed were far from democratic in the full and genuine sense of which we would approve? The alternative of a Maoist takeover would mean an even less democratic development, and an even more remote prospect of democracy returning to that country. Does she agree that, while the actions being taken are understandable, we should at least understand also the direction in which King Gyanendra is trying to move in his efforts to establish a more stable democratic structure that can resist and defeat the Maoist rebels who would destroy the country?

Baroness Symons of Vernham Dean: My Lords, that is why we are proceeding as we are and trying to ensure that we maintain a dialogue with the King. I mentioned that we have temporarily withdrawn our ambassador. He has now returned to Kathmandu, and is seeking further meetings with the King on the issues I raised a moment or two ago.
	The noble Lord is right about the position with the Maoists. There has been terrorist activity, the use of child soldiers, abduction, targeted assassinations, and the use of bombs in public places. It is a delicate and difficult position. Ensuring that we encourage the King to resume the infrastructure and the institutions of democracy and the rule of law, but at the same time ensuring that we do not thereby encourage the Maoists to believe that we have in any way sided with their side of the argument is a matter for the ambassador, for my right honourable friend and others.

Lord Bramall: My Lords, it may be desirable to return to constitutional government as soon as possible. With things as they are, however, that is just not possible, as the noble Lord, Lord Howell, pointed out, until the security situation improves. Will the Minister therefore not agree that, since the Nepalese Government would find it difficult to improve the security situation without our help and advice, we have a serious dilemma here. Is it really the right thing to remove our military support at this time? Nepal, after all, is an important country to us, even as it is with all its warts.

Baroness Symons of Vernham Dean: My Lords, I do believe it has been right to withdraw the tranche of military assistance as a mark of our concern, not only over the dismissal of the Prime Minister, but over the King's statement on a state of emergency. We do not agree that it was necessary for the King to suspend the rights of freedom of expression, of association or to a free press; nor to force the detention of party leaders, or to increase the numbers of political prisoners. We do not think that is the right path for the King to have taken, much as we appreciate the difficulties over security.
	As I indicated, however, our ambassador has now returned, and we are seeking further discussions with the King on these issues. I hope that we will manage to find a way to help the return to democracy and security.

Lord Avebury: My Lords, in addition to the withdrawal of our military assistance, will the Minister confirm that we have suspended our programme of assistance to the police, the prison service and the Prime Minister's office, and have decided to undertake a comprehensive review of our development programme in Nepal? Can she say anything further about the meeting of donors that was held on 14 March in London, and whether they have all accepted the suggestions made by the Swiss Agency for Development at that meeting? Will she further say whether the United Kingdom, in collaboration with India and the United States, has made any proposals for the resumption of negotiations with the armed opposition?

Baroness Symons of Vernham Dean: My Lords, I cannot say whether we have gone along with all the Swiss suggestions from the meeting to which the noble Lord referred. However, I can tell him that we have reviewed the way in which we have been giving aid and have decided that some of the aid programmes—as they relate to prisons, the police and the Prime Minister's office—are not now programmes that we wish to pursue, or at least not for the time being. The matter is being reviewed in concert with our colleagues in the EU and elsewhere.
	I sense a feeling in your Lordships' House that we must side either with the King or with the Maoists over this, but that is simply not how Her Majesty's Government understand the position. Let it be clearly understood that we shall have no truck with the terrorism on the Maoist side, but we do not believe that the King's way of dealing with this matter is likely to lead to success, because he has suspended the fundamental rights of freedom of expression. That is not the way in which to find a solution to the problem, which will be susceptible not to military action but to talking through the undoubted problems that Nepal has.

Sexually Transmitted Diseases

Baroness Gardner of Parkes: asked Her Majesty's Government:
	What measures they will take in response to the major increase in sexually transmitted diseases, including syphilis, over the decade to 2002; and whether they will extend proposed chlamydia screening programmes to include men.

Baroness Andrews: My Lords, government measures to tackle sexually transmitted infections were recently set out in the public health White Paper, Choosing Health, including an additional investment of £300 million over the next three years to improve services and raise awareness across all aspects of sexual health, including syphilis. The national chlamydia screening programme already screens young men, unlike programmes in some other countries which focus solely on women.

Baroness Gardner of Parkes: My Lords, I thank the Minister for that reply. Unfortunately it is not easy to get young men to attend the screening. I understand that there is now a pilot scheme in operation, whereby they will be able to have these tests at a pharmacy. Could the Minister tell us more about that pharmacy scheme—in particular, where it is available; the cost to the patients when they present; whether they have to pay a fee on a prescription basis, or what; whether there is suitable confidentiality and anonymity; and whether the better test is used? As I understand it, 30 per cent of the EIA (enzyme immuno assay) tests have proved wrong. There is a much better test, the NAAT—the nucleic acid amplification test—which is much more reliable and is recommended to be introduced in all hospitals. Which tests are pharmacists using, and how can we encourage more young men to attend?

Baroness Andrews: My Lords, the noble Baroness is quite right: it is a very interesting development. The pilots for chlamydia screening in pharmacies were anticipated in the public health White Paper. We believe that it will be easier to reach young men in such a way, as they are quite reluctant. You cannot do opportunistic testing with young men as you can with young women, who present themselves at contraceptive clinics, for example.
	The two pilots are in London and Cornwall. The pharmacists will fit in line with the national chlamydia screening programme and young people will take the tests away. That will be free of charge. I do not know what test will be used; I suspect that it will not be the NAAT, but I may be wrong about that, and I shall write to the noble Baroness about it. They will then return the evidence to the pharmacy and partners will be notified if necessary, and so on. The pilots will begin in the autumn and last about two years, and we shall evaluate them independently. We shall be looking in particular at the uptake of men in that respect, and I hope that the situation will become much more optimistic.

Lord Chan: My Lords, would the Minister not agree that while there has been screening and the increase of infections such as chlamydia has been proven, the treatment is actually quite straightforward? A more serious concern is with the increase in HIV, especially among young people. What will the Government do to educate younger people about that serious infection?

Baroness Andrews: My Lords, again, that is a very serious point. We have some good news about HIV, in that many people are being diagnosed earlier. But there is no doubt that we have higher figures. Prevention has to remain the cornerstone of the policy, and in the White Paper we announced the biggest media campaign for 20 years with £50 million being devoted to promote prevention with key stakeholders. It is very important to work with local community voluntary organisations in this field, with the African communities and with organisations such as the Terrence Higgins Trust. There is a lot of work going on, not least in targeting campaigns on gay men in settings where we know we can reach them. But it is a very serious problem.

Baroness Knight of Collingtree: My Lords, does the Minister share my concern at the fact referred to in the House of Commons Health Committee report that nearly half of all NHS laboratories are still using a test that may miss as many as 30 per cent of infections? Can the Minister tell us anything about how we may be able to counter that problem?

Baroness Andrews: Yes, my Lords. The noble Baroness refers to the chlamydia test. There is good news about that in that we are developing a screening programme. In fact, the national screening programme that now reaches about a quarter of all primary care trusts uses the new nucleic acid testing—the NAAT test, so-called—which is more sensitive. We have invested £8 million in the conversion of laboratories so that they can use that test. In fact, every strategic health authority put in a bid, and we have been able to fund them to do that. We think probably that we shall have the full programme running by the first quarter of the next financial year, with the new test.

Baroness Neuberger: My Lords, would the Minister now agree that sexually transmitted infections of new kinds now seem to be on the increase? The example I give is one that I find really difficult to pronounce—that is, Mycoplasma genitalium, which has been called the "new chlamydia". Will the Government commission research on whether we need screening for other sexually transmitted infections beyond what we are doing at the moment?

Baroness Andrews: My Lords, I congratulate the noble Baroness on her pronunciation. I shall try to get it right as well.
	Unlike with chlamydia, we do not know very much about the epidemiology of Mycoplasma genitalium; indeed, there is no current standard methodology for sampling the female genital tract to pick up the infection. However, we are aware of the problem, and of a study that has found some association between the disease and pelvic inflammatory disease, and recommended that further studies were needed. So yes, we are watching the situation quite closely.

Hereditary Peers' By-Election

The Clerk of the Parliaments: My Lords, with the leave of the House, I am now able to announce the result of the by-election to elect a hereditary Peer in the place of the late Lord Aberdare in accordance with Standing Order 10.
	Three hundred and forty-eight Lords completed valid ballot papers. A paper setting out the complete results is being made available in the Printed Paper Office and the Library. That paper gives the number of votes cast for each candidate.
	The successful candidate was the Viscount Eccles.

Business of the House: Debates this Day

Baroness Amos: My Lords, I beg to move the Motion standing in my name on the Order Paper.
	Moved, That the debates on the Motions in the names of the Baroness Perry of Southwark and the Lord Howard of Rising set down for today shall each be limited to two and a half hours.—(Baroness Amos.)

On Question, Motion agreed to.

Railways Bill

Lord Davies of Oldham: My Lords, I beg to move the Motion standing in my name on the Order Paper.
	Moved, That the amendments for the Report stage be marshalled and considered in the following order:
	Clause 1, Schedules 1 and 2, Clause 2, Schedule 3, Clauses 3 and 4, Schedule 4, Clauses 5 to 19, Schedule 5, Clauses 20 and 21, Schedule 6, Clause 22, Schedule 7, Clauses 23 to 25, Schedule 8, Clauses 26 to 45, Schedule 9, Clauses 46 to 52, Schedule 10, Clause 53, Schedule 11, Clauses 54 to 58, Schedules 12 and 13, Clause 59.—(Lord Davies of Oldham.)

On Question, Motion agreed to.

Council Tax Capping

Lord Rooker: My Lords, with permission I shall repeat a Statement made in the other place regarding council tax capping by the Minister of State for Local and Regional Government. The Statement is as follows.
	"I should like to make a Statement about council tax in 2005–06, and the action that the Government propose to take in response to those local authorities which have set excessive budgets.
	"Figures released today confirm that the average council tax increase in England in 2005–06 will be 4.1 per cent. That is the lowest council tax increase in more than a decade, and the second lowest ever.
	"The reason council tax increases have come down markedly compared with previous years is two fold. First, the Government have provided another good settlement for local authorities—one which was approved on 2 February. For the third year in succession, all authorities will receive a grant increase in line with or above inflation in 2005–06. Many will receive substantially more. The average formula grant increase from government is 5.6 per cent. Adding in specific grants to authorities takes the increase up to 6.3 per cent. We have increased funding for local government by 33 per cent in real terms since 1997; that is in stark contrast to a 7 per cent reduction in the four years up to 1997.
	"Secondly, the Government's judicious use of their capping powers has shown how seriously we view the need to protect council tax payers against excessive increases. In 2004–05, when we made it clear that we were prepared to use our reserve capping powers for the first time, the average increase in council tax dropped to 5.9 per cent from 12.9 per cent in the previous year. The 2005–06 increase has come down even further to 4.1 per cent.
	"Given our substantial investment in local government—and the scope for efficiency gains—we gave a clear message to all authorities about council tax in 2005–06. We said we expected to see an average increase of less than 5 per cent.
	"I set this out in a letter to local authority leaders on 9 December. At the same time, I informed them that we were once again prepared to use our capping powers to deal with excessive increases.
	"I later wrote to individual authorities which, despite our warnings, were reported as proposing high increases. We informed them that the 2004–05 capping principles should not be considered a benchmark for 2005–06, making clear we were prepared to take even tougher capping action than we did in 2004–05.
	"We are pleased that the vast majority of authorities have responded positively to the Government's strong message on council tax. This is borne out by the fact that we now have the lowest increase in more than a decade. I congratulate all those authorities. I know most authorities are taking seriously the need to minimise demands on their council tax payers.
	"However, there remains a small number of authorities that have set excessive budget and council tax increases. That is why I am again this year making a Statement to the House about the action we are proposing to take against authorities whose budget requirements are excessive.
	"I should like to remind honourable Members about the provisions of the capping legislation. In order to determine whether budgets are excessive, we must consider a comparison of the authority's budget requirement for 2005–06 with that of a previous year. The legislation also allows us to determine other principles, such as increases in council tax.
	"In 2004–05, we determined a range of budget and council tax principles for different categories of authority. This was in recognition of specific factors affecting these types of authority that year. I detailed the principles when I reported to the House on 29 April last year.
	"For 2005–06 we made it clear that we were prepared to take tougher capping action than last time and that the principles used for 2004–05 should not be taken as a benchmark. Our view is that authorities' 2005–06 budget requirements are excessive if they show an increase of more than 6 per cent over their 2004–05 budget; and if their council tax has increased by more than 5½ per cent over the same period. These principles have been applied to all authorities.
	"According to the principles I have described, nine authorities have set excessive budgets for 2005–06. These are Aylesbury Vale, Daventry, Hambleton, Huntingdonshire, Mid Bedfordshire, North Dorset, Runnymede, Sedgemoor and South Cambridgeshire. We are writing to these authorities today informing them of our decision to designate them with a view to capping them in year and notifying them of the maximum budget we propose to set for each of them.
	"The authorities now have 21 days in which to respond. We will carefully consider the information we have required them to send us along with any other representations they make, before we take final decisions. We can then either make an order, to be approved by Parliament, designating them at the level of the proposed maximum budget or another level; or withdraw the designation and nominate them instead.
	"Honourable Members will recall that in 2004–05 we took capping action against 14 authorities. Six were designated for capping in-year and a further eight authorities were nominated and set notional budgets for the purpose of future capping comparisons. I am pleased to say that none of the authorities against which we took capping action in 2004–05 has set an excessive budget in 2005–06.
	"This, and the fact that the average council tax increase in 2005–06 is the lowest in a decade, shows that although we have used it only reluctantly capping has been effective in restraining council tax increases.
	"We would, of course, have preferred not to use our capping powers. We would not have to take action had all authorities heeded our clear message about increases in 2005–06. However, we also have a duty to protect council tax payers from excessive increases and we will continue to do so. The actions we are taking represent a measured response.
	"If anyone thought the Government's capping action in 2004–05 was a one-off they will now surely think again. The message we are giving is loud and clear. High council tax increases are a thing of the past. The public will not tolerate excessive council tax increases either now or in years to come; and neither will the Government".
	My Lords, that completes the Statement.

Baroness Hanham: My Lords, I thank the Minister for repeating the Statement made in the other place. I was, of course, interested in the Ministers' comments about the Government's munificent settlements to local authorities—an explanation which did not include any indication of the extra costs and burdens that local authorities have been asked to take on, including the still expensive inspection regimes which all have to be funded.
	It is true that the settlements to local government have been reasonable over the past few years. But they had to be because without central government support local communities would have been bearing an even more unacceptable level of local taxation.
	It is, of course, a recognition by the Government that these increases are now absorbing over 25 per cent of pensioners' state pensions and that proportion is increasing year on year. Indeed, the Government have now been shamed into an inadequate response in the Budget of giving a one-off £200 to pensioners as an election gift, whereas the Conservatives have promised £500 on a recurring basis—a much more generous and realistic contribution. It is those on static incomes in particular who find the council tax an expense too far.
	The next problem to hit local areas will be a rate revaluation. It will be interesting to see, once that comes, what additional resources the Government will put in to protect those who will be badly affected by that.
	I should like to ask the Government their rationale on capping council tax increases against council tax costs. For all the brave words of the Minister in this House and in the other place, practically none of the authorities which appear on the list today—indeed, I venture to say none—is the world's big spenders. Those authorities' council taxes are remarkably low so a small monetary increase appears as a very large percentage above the Government's limit of 4½ per cent.
	Perhaps I may take one or two examples from the list. Daventry has a council tax of £109.62. That is an increase of £13.12 over last year. That is not £13.12 per week but a year. South Cambridgeshire had a huge 100 per cent increase. That is up from £70 last year to £140 this year. But last year it had a 0 per cent increase. Huntingdonshire, at £106.54, is £8 higher than last year—admittedly a 12.7 per cent increase. Hambleton has an increase of £11.97, making Hambleton's increase 16.5p a week.
	The others are all the same. These are small district councils with, in at least two cases, council tax rates below even the Government's assumed level. So the brave words about casting forth and stopping all these enormously high increases are all words. What has happened about the really big spenders whose percentage increases may well be within the Government's guidelines but whose council taxes are large, and whose expenditure and burden are large?
	What happened to protect the Greater London Authority where the tax increase was well over 5 per cent, well above the Government's guidelines? They remain untouched by the Government's hand.
	We all recognise that the Government must have the right to curb rogue councils. But perhaps the Minister will forgive me for saying that it looks as if the Government have gone for the easy option and the wrong end of the telescope.

Baroness Scott of Needham Market: My Lords, I thank the Minister for repeating the Statement. Local government finance tends to be one of those topics that makes most people's eyes glaze over, but when it comes down to it, it is hugely significant for the people who live in a particular area. This topic also has huge significance for local government itself and how it is viewed.
	When I was a council leader during the 1990s, I regularly went to conferences at which representatives of the Labour Party, who were then in opposition, ranted about the unfairness of the capping regime and talked about how one of the first things that they would do as a Labour government would be to scrap it on the basis that it was an unwarranted interference with local democracy. Yet, we have just heard a Statement that would have done credit to any Conservative Minister during the 1990s. I had a real Animal Farm moment during the reading of this Statement. It gave me no pleasure at all, because I would like to think that when the Government talk about localism and freedoms and flexibilities for councils that they actually mean some of what they say. Yet what we have seen today is an unwarranted intrusion, and I shall justify those comments in relation to the affairs of some very small councils.
	During the Statement, the terms "excessive budgets" and "excessive increases" were used pretty much interchangeably. But they are not the same thing at all. As we have heard, poor, benighted South Cambridgeshire has increased its council tax 100 per cent. Put that way, one has a sharp intake of breath. But even after that increase the level of council tax is being set at £140 a year. Many of us wish we lived in authority areas where council tax was levied at that rate.
	Can the Minister say what the cost of this capping exercise will be? If the Government reduce the £70 increase in South Cambridgeshire by, say, £20 per household in one year, how much will it cost to re-bill those households? I would suggest that, in the end, the re-billing exercise will cost as much as is saved by the reduction, so the council tax payer will feel no benefit at all. In their consideration of such matters, will the Government take into account how local people feel? Do we know whether people in that part of Cambridgeshire feel that, at £140, they are still obtaining value for money and that, perhaps, they do not wish to see the type of cuts that might have to take place if the Government's guidelines are to be met.
	The truth is that today's Statement on capping is an entirely political, rather than a practical, exercise. It will not save local council tax payers anything much at all. The Government are congratulating themselves that the tough and macho stand that they have taken last year and this year has resulted in councils behaving themselves. However, local councils have spent the past couple of years scraping, cutting new programmes and selling assets—anything to meet the Government's criteria. That is not a sustainable solution and the Local Government Association is making it clear that councils will face a black hole of some £1.5 billion next year, due to the increasing costs of contracts, supplies and services—and new duties that are placed on them by the Government, such as licensing and freedom of information.
	What is needed is a long-term, sustainable solution. At the very least the ODPM should press ahead with its three-year grant settlement and the Lyons review. The Local Government Association is proposing a reformed tax system with a proportion of national income tax going to local government. The Liberal Democrats would prefer to see a full-on local income tax based on ability to pay, where local councillors are accountable to local people through the ballot box and not through threats from central government.

Lord Rooker: My Lords, there is little that I can say in response to that, because there were not many specific questions. It is true that these are quite small authorities compared with the generality of councils, but, if that is the case, so what? All of the others have met the criteria. These are the only authorities that have not met the criteria.
	Moreover, it is not as though this has come out of the blue. We see press reports of what might be happening in these authorities. All of them have had contact with Nick Raynsford, the Minister for Local Government and the Regions. He has written to them and, in some cases, there have been three or four exchanges of correspondence. In some cases, modest reductions have been made. In others, following the correspondence, there was no change whatever from their first proposals. They knew that we had said that average increases should be less than 5 per cent and that their proposals would not be acceptable. They were all way over that.
	I shall not detail the merits of individual cases—that would be wrong. I understand how one could consider the situation in South Cambridgeshire and take a gulp. There are factors, as the noble Baronesses have mentioned, that put that in a different perspective. However, a statutory process is now under way. Under the legislation, councils have 21 days to make representations. It would be wrong if I were to comment on the individual authorities. I should say that we do not consider them to be "rogue authorities". That phrase has not crossed the lips of any Minister, as far as I know, and it certainly does not cross mine.
	The noble Baroness, Lady Scott, said that local government finances can be complicated. Well, they have certainly cleared this Chamber. But she is quite right—they do affect families in a significant way, as the noble Baroness, Lady Hanham, said. I do understand that. Nevertheless, the Lyons review will report later in the year. A problem has been identified with the operation of council tax. This issue has nothing whatever to do with revaluation, which is not a process for increasing local government funding, but simply for the revaluation of properties. That is not affected in any way, shape or form by this.
	There is now a process that must be gone through regarding these councils. Whatever other issues take place, that process is not suspended by a purdah or anything else. Local authority budgets must be set and people need to know what they will be.

Lord Greaves: My Lords, I, too, thank the Minister for repeating the Statement in this House. Is it not the case that local authority budgets and the level of council tax, certainly for ordinary district councils and for many large councils, too, depend far more on the level of government grant to those authorities than on local decision-making processes? The most important reason for the level of spending and the level of council tax in many authorities is how much money they receive from the Government. Therefore, is it not wrong that, according to the Government's own criteria, many authorities and many ordinary districts are receiving less money than the Government themselves, in their review of grants three years ago, said that those local authorities should receive?
	Many district authorities in Lancashire—and I declare an interest as a member of Pendle District Council—over the past three years and this year will receive a seven figure sum, millions of pounds, less in Government grant than the Government themselves say that those authorities should receive. Under those circumstances, is not the capping of council tax increases at about 5 per cent an extraordinary and futile measure in terms of allowing local authorities to exercise their own democratic decisions on how much they spend and how much they put up council tax?
	Until the Government are prepared to give the amount of money which they themselves said that those authorities should receive, all these other matters are completely arbitrary.

Lord Rooker: First, if there were only nine local authorities in the country, that contribution would have some validity. There is the best part of 400 local authorities in the country. I have listed nine. Please let us consider this in proportion. Secondly, as I have said, in 2005–06, compared to 2004–05, the Government have provided an extra £3.5 billion for local government, which is 6.3 per cent more than the previous year.

Lord Shutt of Greetland: My Lords, if I may return to the Statement, it says that:
	"The authorities now have 21 days in which to respond".
	Then, that the Government:
	"will carefully consider the information".
	It then says that the Government can either:
	"make an order, to be approved by Parliament, designating them at the level of the proposed maximum budget or another level; or withdraw the designation and nominate them instead".
	I do not know about other noble Lords, but I have been picking up a rumour that there could be an election. If that is the case, it seems that the first option would not be available. How can Parliament approve it? If there is an election, are the Government going to wait until June or July before people can know where they stand on what rates they will be paying? So the Government will:
	"withdraw the designation and nominate them instead".
	Is that going to be the case?

Lord Rooker: My Lords, I cannot presume anything about what will happen. However, I asked officials—who came to brief me after the other Statement—whether anything in this will be affected by the purdah arrangements. That is, the things which governments quite rightly cannot do once an election is called. This is a statutory process. The local authorities have the right to go through the process to know what their arrangements will be. I am assured that that process can continue.

Schools: Pupil Behaviour

Baroness Perry of Southwark: rose to call attention to pupil behaviour in schools; and to move for Papers.
	My Lords, this is a topic which should attract the interest of all who care about the future of our country and the social cohesion on which it must rest. For parents, the way in which a school portrays its standards of pupil behaviour is often a determining factor in how they rate the school. From long years inspecting schools all over the country, I can affirm that one can sense the ethos of a school by the way in which pupils treat adults and each other, the way in which they conduct themselves in corridors, playground and classroom, and the image of the school which is portrayed by their behaviour beyond the boundaries of the school.
	It may be timely, in this debate, to remind ourselves why the standard of pupil behaviour is so important. First, it is because schools which score well on the criteria of pupil behaviour also score well on pupil performance and achievement. Without a well ordered community—and behaviour which respects the purpose for which the school exists—there can be little, if any, hope of individual pupil achievement, or overall high academic and other performance for the school. This is for the obvious reason that misbehaving pupils interfere with their own and their classmates' ability to learn from their lessons, or time in quiet study areas like the library. I have seen pupils driven with frustration by the disruptive behaviour of a small group of their classmates. Such behaviour means disruption of lessons, and distraction of the teacher's attention—making it nigh impossible for those who want to learn to get anything useful out of their time spent in school.
	But it is for another and, in some ways, more disturbing reason that disruptive and negative pupil behaviour is so closely allied to poor academic performance. Where there is disruptive and anti-social behaviour, the teachers have lost the respect and authority which is the basis of successful teaching and learning. Although the organisation of schools, admissions procedures, funding and the structure of governance are all factors which either help or hinder their achievement, none of these come close to the importance of able teachers operating under good leadership, with the respect and authority they need from the wider community if they are to do their job for our children.
	Even more widely, however, disruptive and anti-social behaviour in schools is a matter which touches us all. Academic research, as well as the fascinating programme series presented by the noble Lord, Lord Winston, has clearly shown that pupils whose behaviour is unacceptable in school almost always go on to become the anti-social and even criminal members of their adult society. Unchecked and unhelped, unruly behaviour can become truly anti-society. The price we are paying for the failure of government policy towards poor behavioural standards in our schools is the breakdown of order, the culture of binge-drinking and football violence, and the disregard for others—and the law—which is endemic now across parts of our national scene.
	I feel a deep sense of sadness, therefore, at the recent Ofsted report which cites the decline in pupil behaviour in secondary schools over recent years. Inspectors found that standards could be described as "good" in only two-thirds of schools—62 per cent—falling from three-quarters—76 per cent—in 1997. That figure has never been reached again since Labour came to office.
	Behaviour in one in 10 of our secondary schools is downright "unsatisfactory", in the inspectors' view. This category includes one in five secondary schools where inspectors found that a "gang culture" was widespread, and one in two where staff felt that gang culture was a problem for them. The inspectors also found that pupils self-harm in about half of our secondary schools and even in about one-third of our primary schools. As a sad vision of what the future might be, one need only reflect on the fact that 40 per cent of schools reported that they had to deal with pupils bringing knives and other weapons into the playground or classroom—and that drug culture was "a daily challenge" for older pupils, and for those in the special referral units to which disruptive pupils are sent.
	The inspectors' report also said that children with special educational needs make up a third of the pupils who are identified as disruptive. One would think that this alone might give the Government pause in their policy of insisting that such pupils must be accepted in all secondary schools, regardless of whether the head feels that the school and its staff are equipped or trained to deal with their special problems. It is deeply disturbing to read that, last year, there were over 17,000 expulsions for violence in just one school term; that an increase of 31 per cent over the past seven years means that now, each year, over a million children play truant—and what does that say about the quality of their school experience?—and that, according to teacher unions, a teacher is assaulted on average every seven minutes.
	Alongside the inspectors' reports of schools with behaviour problems and the allied figures of growing unexplained absences—or truancy, in plain speak—are the rising numbers of school exclusions coupled with poor provision for those excluded. Excluded pupils find themselves in a pupil referral unit (PRU), where inspectors found some of the most disturbing failures of discipline and evidence of both drug abuse and violent behaviour. Urgent action is needed now to make these places a vehicle for real re-education and rehabilitation, before the pupils concerned become the gangsters and drug dealers of the adult world.
	The use of PRUs—or sin-bins, as many teachers call them—is a difficult matter for balanced professional judgment. While, of course, the child and his or her parents have a right to be heard, it cannot be right that the decision of a senior professional—the head of the school—is overruled by one in five of the appeals panels. The Government's targets, to reduce exclusions by one-third between 1997–2002, meant that more classes remained disrupted—and that more pupils who wished to learn, and teachers to teach, were unable to do so.
	Although there were positive messages in the inspectors' overall summary, and there are many wonderful schools, these are signs of a decline in the ability of teachers to do the job they and we expect them to do. I ask myself why this has happened to a school system which used to command widespread public respect. I do not blame the teachers. It is my profound conviction that we are now reaping the alarming harvest of the Government's policies in recent years. Naming and shaming schools, a constant barrage of statements about bad teachers and failing schools—coupled with a stream of directives, targets and regulations—have destroyed the morale and professionalism of much of the teaching profession and undermined public trust in what they are doing.
	The relationship between teacher and taught is a delicate and fragile one: but it is an essential part of what makes for successful learning, leading to high achievement. Governments have no place in coming between teacher and pupil in the way we have seen in recent years. Politicians have a legitimate right to determine the overall goals of education on behalf of the society they represent. They also have a duty to ensure that schools have the necessary people, rightly trained, and the tools to do their job well. But politicians and government have no place in the detailed professional judgment of how these goals should be achieved.
	I well remember and often reflect on something I heard the former Swedish Minister of education, presiding over one of Europe's most successful education systems, say some years ago. He asserted that the core of his policy was, "We trust the teachers". To that I say amen!
	In contrast, this is a government who believed they could not trust teachers. They believe, for example, in telling them how literacy and numeracy should be taught minute by minute. I have been an observer in the class of a highly able teacher struggling against her better judgment to follow the government diktat about how the literacy hour should go. In the process, she had to silence the curiosity of one of her pupils; end a stimulating exchange with others just as they were becoming engaged; and stop herself almost in mid-sentence as she was explaining a point from the text, all because the rules said that after so many minutes the class should "move on" to the next predetermined activity.
	Was such interference justified? It might be a high price to pay if, indeed, we had improved matters. Well, all we now know is that since the literacy hour was introduced in 1998, almost 1.2 million children have left their primary schools with poor literacy skills. And this is even if we believe the Government's claim to have raised the level 4 base performance from 65 per cent to 75 per cent—although that is disputed by many experts.
	Literacy is too important for anyone to play political games. A researcher at the US Department of Justice recently said,
	"In a school setting, reading failure meets all the requirements for bringing about and maintaining the frustration level that frequently leads to delinquency".
	In other words, the link between poor literacy skills and delinquent behaviour is all too direct and clear. As one tearful British nine year-old who had fallen behind in reading put it, "Reading affects everything you do".
	This is only one example of how the Government's habit of trying to interfere in the details of classroom management has failed. There are many more. A barrage of targets has distorted the work schools were doing. Those in difficult areas with intake from homes where standards of education are low and parental attitudes towards schools are suspicious if not hostile, have a very different challenge from those in leafy suburbs where children enter school with a readiness to learn and an instinctive respect for teachers. Yet targets too often denigrated the first and downgraded the expectations of the other in a mistaken attempt to bring all to a common denominator of achievement on target.
	This is such nonsense one wonders why the Government remain so wedded to targets. Yet the Prime Minister recently claimed on television that targets are his way of demonstrating to the public that they are getting value for money. I would say, "Only if the targets are the right ones, adapted to the very different circumstances of individual schools, not to some Whitehall-imposed norm which fits no-one".
	I return to the issue which I believe is central to this problem; that is, the authority of teachers. Their skill, the relationships they are able to establish with their pupils, and the stimulus and absorbing interest of what they teach is the only real answer to the problem of disruptive pupils. Time and again in schools which have been taken over for reform, that is the only magic formula which they have found to exist.
	The naming and shaming of schools—the public designation of a "failing" school—has, I am convinced, played a major role in undermining the authority of teachers with their pupils and with society, and on that authority the delicate balance of school success is based. If pupils feel that the society around them, from politicians, to newspapers to general public opinion has no respect for teachers, it is not a big step to suppose as young as eight or nine that you too have no call to respect your teacher or your school. I often wonder whether the Government have reflected on what it means to teacher-pupil relationships to be in a school which is publicly declared to have failed.
	In the light of this slow erosion of status and therefore their morale and professionalism, it is not surprising to find that the number of teachers leaving the profession has nearly doubled since Labour came to power. Sadly, it is often the best qualified, who can easily find themselves better paid and more valued in other professional roles, who have left the classroom with relief. The burden on heads, and the low status with maximum risk of public shaming, would deter many of us from taking on the role of a school head in any inner-city school today. It is therefore also not surprising that last year we saw headships being re-advertised again and again, not least in London schools where over 300 headships had to be re-advertised a least once.
	This is not a situation which can be allowed to deteriorate further. Teachers must be able to assert their authority and exercise their professionalism again. Restoring autonomy to schools and giving heads real power to run them according to their understanding and knowledge of their own staff, pupils and community must be the only right way ahead.
	I have always believed that education, because of its long time-scale, should strive for consensus in politics rather than confrontation. It is therefore with some reluctance that I end with my indictment of this new Labour Government's policies and practices in education over the past eight years. They have undermined the authority of teachers, surrounded them with red tape, paperwork and regulation, distorted their work with targets, come—fatally—between their professionalism and their pupils, and in so doing lowered their morale in ways which have lost many of the most able from the profession entirely.
	As one who believes in teachers and their dedication to their job, I can but hope that soon we will see a government who, quite simply, allow teachers to teach, and take pride in what they are doing. I beg to move for Papers.

Lord McKenzie of Luton: My Lords, I begin by thanking the noble Baroness, Lady Perry, for securing this debate on a matter that has featured in a number of our recent deliberations: namely, the Education Bill; 14-to-19 issues, which we discussed just a week ago; and even the School Transport Bill. It is certainly topical.
	It is, however, vital that we see the matter in context. As the Ofsted report, Managing Challenging Behaviour, makes clear, the great majority of children and young people enjoy learning, work hard and behave well. They are also reaching higher levels of attainment year by year. I know that it is important that we concentrate on what needs to change, which typically means the problem areas, but we should never forget to praise all the good things that are happening in education and the commitment of so many young people to succeed.
	We should also acknowledge that from Ofsted inspections since 1996–97, behaviour in our primary schools has gradually improved, with 90 per cent of schools inspected experiencing behaviour which is judged to be good or better. This is to be welcomed.
	However, we know that for secondary schools the reverse is the case and there are challenges to meet. Part of the problem in analysing the behaviour issue is one of definition. But according to Ofsted, the most common form of poor behaviour in schools continues to be lowish levels of disruption of lessons and aggressive behaviour, either verbal of physical. It affects not only the individual concerned, but those who want to make progress with their education and it can sap the morale of teachers.
	The Ofsted recommendations for how the challenges might be met are not particularly surprising. The best LEAs and schools are well advanced with a range of strategies to meet these challenges. There is a parallel with what must be done to raise levels of attainment. As I think I mentioned in a previous debate, I chair our local lifelong learning scrutiny committee. It deliberated on what made a difference in attainment, and there are parallels in dealing with challenging behaviour. We came to the unremarkable conclusion that there was no single nugget which made the difference. A range of things need to be done consistently and done consistently well.
	Leadership in schools is one of them. I am sure that most noble Lords here today would be able to cite examples of where the performance of a school has been changed for the better by a charismatic head teacher with a strong management team and examples where the reverse is the case.
	Good leadership has many facets, part of which is ensuring that there are clear policies to tackle bad behaviour and that these are consistently applied. But I believe that the best leaders of schools are those who develop an ethos which values learning and raises the aspirations of every pupil. There are lots of excellent examples up and down the country, and I can cite some from my own community where this is happening. We should not denigrate what is happening in our schools and the progress that teachers are making.
	Good teaching makes a difference, of course, and Ofsted draws attention to the fact that children who behave badly in some lessons do not in others. I wonder, however, whether we do enough to address the learning as well as the teaching. I have always assumed that good teaching would automatically encompass an understanding of different learning styles, with lessons planned to address these. From some work that we have done locally, I wonder whether that is universally the case and whether there is a settled consensus among education professionals on the matter.
	The Tomlinson report, and the Government's response which we debated last week, was in part about broadening the curriculum and offering all young people a learning experience with which they can engage. It is clearly going to help address some bad behaviour issues. For youngsters from some ethnic minority communities there are issues about identifying good role models, and the imperative to make the composition of the teaching staff of any school more reflective of the local community as a whole.
	Consistency of approach in responding to bad behaviour in schools is acknowledged as being part of the strategy to improve outcomes. This is clearly easier in schools which have a low turnover of staff and good retention policies. LEAs have a strong role to play in helping schools develop good retention and recruitment policies. At a national level, the significant increases in funding and the additional recruitment and training of teachers which has taken place under this new Labour Government, are an essential prerequisite of rolling back the scourge of bad behaviour in our schools.
	If we want young people to value education, we need to give them the chance to learn in good quality buildings with state-of-the-art equipment. If their learning environment is run-down and shabby, it sends the wrong messages about the value that society places on their education. If we are careless about their schools, why should they be different? That is why investment, which is going into the rebuilding and refurbishment of our schools up and down the country, is so vital. Building schools for the future, and budget measures for the primary sector, will help to change the face of hundreds of schools up and down the country.
	One of the Ofsted findings was that behaviour is significantly better in settings which have a strong sense of community and where schools work closely with parents. That is self-evident, but I believe that it is of particular relevance in early years. Our local experience involved a Flying Start programme, where family workers and family rooms were developed in infant schools, initially those in the most deprived areas of the town. The programme provided support for families via the school, and especially for communities where English was not the first language spoken at home. Support via the school was more welcome than more direct support from social services, which some saw as having a stigma attached.
	The outcome of this engagement was very positive, with improving attendance, higher achievement, better behaviour, and with the bonus of an unintended spur to adult education take-up by parents. The family worker was typically a woman, engaging mostly with mothers, but I was at a school just this morning which had successfully bid for early years funding to employ somebody to work specifically with fathers.
	Engagement with parents and fostering an educational community is easier in early years. What remains a very big challenge is to get that engagement with some families of young people in the secondary education sector, particularly if the parents themselves have lost out on their schooling. As a governor of a local secondary school I have found it incredibly dispiriting when sitting on a sub-committee reviewing fixed-term exclusions and, time and time again, seeing no parent appear to support their children. We should not underestimate the very difficult family circumstances in which a minority of children still live.
	I think that the biggest challenge concerning behaviour is to engage with those communities and the families within them who are the most deprived. That is not just a task for schools or for LEAs. Some of these communities have been scarred by poverty and the under-investment of the past. They are the areas that have historically experienced that accumulation of disadvantage, including poor housing, high unemployment, the greatest health inequalities and the highest crime. We are still living with the legacy of those who would have us believe that there is no such thing as society or community.
	Targeted approaches to regeneration are, however, beginning to turn the tide—certainly for us locally. A combination of programmes and investment, including Sure Start, the New Deal for Communities, the Single Regeneration Budget and Neighbourhood Renewal Funding, as well as European monies, are uplifting these pockets of erstwhile deprivation. Improvement in the economy and anti-poverty strategies are making life easier for families. Of itself, this will not automatically bring the reconnect with the value of education, but it is part of seeking to ensure that all communities and all families have a stake in the future.
	Although there are challenges for the issue of behaviour, and we should not underestimate them, I remain optimistic about the future. Much of what the Government have done—the investment that is flowing into our schools—is making a real difference. There are issues about turning back some of the selfish attitudes that sprung from policies which were in place before this Government took office. It takes a while to turn that back and reconnect people with communities, particularly with education. We are set fair, however, to achieve the improvement that we want for the benefit of every pupil in our schools.

Baroness Walmsley: My Lords, I thank the noble Baroness, Lady Perry of Southwark, for initiating this important debate. She knows, as we all do, that the behaviour of children in school can get in the way, not only of their own educational achievement, but that of other pupils. It is for all their sakes that we need to address the matter effectively. However, it is not enough to address the symptoms unless we also address the causes of bad behaviour. In that way we can reduce the need to find solutions.
	First, I would like to say a few words from my own experience as a secondary teacher in a boys' comprehensive school. Luckily for me, it was quite a good school in a rural town, where the levels of deprivation were not extreme and the support provided by senior staff was good. I soon discovered which factors caused boys to behave badly and disrupt lessons. It is commonly accepted among teachers that windy days are a problem. Children coming into a lesson after 15 minutes in a windy playground are very stimulated and take a while to settle down. Then there is the Friday afternoon factor, when children suffer the same "Let's get to the weekend" syndrome as we all face. Similarly, anticipation of holidays when we get to the end of term is a feeling with which your Lordships can no doubt sympathise today.
	However, these are minor factors. I soon discovered that the boys became restless when my lessons were not as absolutely riveting as usual, and I learned to be creative about presenting curriculum material that might otherwise be boring in as interesting a way as possible. Distracting behaviour is often a symptom of disengagement from the work in hand.
	That is why I believe that one of the major causes of the problems we face today is inappropriate curriculum. I will come back to that in a minute. First, it is important to say that we must not fall into the trap of over-estimating the scale of the problem. A recent report from Ofsted, Managing challenging behaviour—which the noble Lord, Lord McKenzie of Luton, has mentioned—has made it clear that behaviour was good or better in 90 per cent of primary schools, 68 per cent of secondary schools and 80 per cent of special schools and pupil referral units, where the most difficult children go. Most disruption is at a low level, with serious incidents—particularly those of a violent nature—being rare. Most schools manage their pupils' behaviour very well, sometimes in the face of serious disadvantage.
	Most young people are well behaved and considerate, and prefer a classroom environment in which they have good teaching and a calm atmosphere. I always believe in listening to children themselves. The Ofsted report had some very telling comments from them. They describe good teachers as being those who respect pupils, offer interesting activities and make learning fun. These are the teachers who set clear boundaries and consequently have less problem with disruption.
	However, to develop into such a teacher, a young teacher needs ongoing professional development in classroom management and understanding adolescent development. He or she needs clear leadership from the senior management of the school. It is not good enough to put young teachers into a classroom environment that they are not equipped to manage. It is not fair to them or their pupils. The same goes for supply teachers, who often have even greater difficulties because they do not know the pupils.
	One of the other recommendations of the Ofsted report was the need for an appropriate curriculum. That is why we support the need for full implementation of the Tomlinson report on 14 to 19 education and the development of a framework of vocational skills and work-based learning programmes, along with academic courses, for all those who want them. These should be on a unit-based system, which can be so motivating for less able pupils.
	Some schools have already used the extra money available through the Government's behaviour improvement programme to establish alternative curriculum schemes for difficult pupils for whom the academic route is an appropriate. I read about the Activate programme in Slough, in association with the local company, Sara Lee, which works well as part of fulfilling the authority's aspiration to achieve zero school exclusions. Pupils are sent to a training centre at the company's headquarters and carry out a work-related curriculum and are helped to secure work placements and obtain vocational qualifications.
	There are many other such programmes and the behaviour improvement programme has had many successes. However, not all schools have access to the funds and I hope that the Minister will tell us today that the Government intend to put some of the extra investment in schools announced by the Chancellor last week into expanding that sort of important programme.
	Ofsted also established that a significant proportion of pupils with difficult behaviour have special educational needs and/or face disadvantage and disturbance in their family lives. That is why it is so important to assess the child's needs as early as possible so that appropriate early intervention can occur. Good quality nursery education and care, carried out by qualified teachers who understand child development and can properly interpret child behaviour, is crucial to that.
	Investment in the early years can save a lot of problems later. That is why we on these Benches believe that the money now being put into the child trust funds would be better spent reducing class sizes up to key stage 1 to no more than 20. We would also invest the necessary resources to reduce class sizes at key stage 2 to no more than 25. It is particularly at this early stage that children need individual attention so that problems can be dealt with and they can learn to read. Ofsted's and other studies have shown that poor literacy and bad communications skills are a common factor among those who behave badly.
	Secondary schools that have good links with their feeder primary schools tend to do better on pupil behaviour, as do those that have good links with parents. Kidbrooke School in Greenwich used its behaviour improvement programme funds to finance a counselling service that provides one-to-one support for pupils and their families, group working and family therapy. It also runs a helpline for parents dealing with crises such as self-harm, drugs and crime. The National Society for the Prevention of Cruelty to Children provides similar services in some schools as part of its "Someone to turn to" campaign and recommends that counselling services should be available in all schools, especially in the absence of adequate adolescent mental health services in some areas.
	Another common cause of bad behaviour has recently been highlighted in a TV programme that has received a lot of attention in other media. Jamie Oliver's programme on the quality of school dinners has highlighted what many of us have known for years: school dinners do not only affect children's short and long-term health, they also affect their behaviour. Large amounts of artificial sweeteners, preservatives and colorants can cause hyper-activity in children. Raised blood glucose caused by eating a lot of sweets and chocolates causes a burst of activity followed by a period of lethargy, none of which contribute to good school discipline and effective learning. I would encourage schools to remove vending machines that sell sweets, chocolate and fizzy drinks and replace them with fruit, healthy snacks and access to our good clean tap water.
	I must say that I have been disappointed by the Government's reaction to Jamie Oliver's campaign. Setting up a trust to provide parents with advice about how to get better school dinners is a sticking plaster, and not a very effective one at that. Parents already have good advice. They can get it from Jamie Oliver. What they really need is investment in school kitchens so that the catering staff have the space, time and equipment to cook real food and the provision of more than 37 pence per meal, so that better quality ingredients can be bought.
	An amount of 50 or 60 pence has been suggested. I do not think that your Lordships would accept a meal—which could be the main meal of the day or the only cooked meal that many children get—if the cost of the ingredients was only 37 pence. If it is not good for your Lordships it is certainly not good enough for a growing child. Can the Minister confirm that the recently announced primary school building programme will include kitchens that are adequate for proper cooking of proper food?
	I do not wish to sound negative, but we must accept that, whatever we do to prevent it, there will always be some disruptive behaviour in schools. It is a matter of hormones—especially that powerful drug testosterone, the effects of which became so familiar to me when teaching boys in a secondary school. That is why we need effective remedies and support for schools. Many schools have good internal referral units that provide smaller groups with well trained teachers who have time to spend understanding the problems of the pupils and helping them to achieve and eventually go back into the mainstream. It was notable how much this sort of attention was appreciated by the pupils to whom the Ofsted inspectors talked during the compilation of the report I referred to earlier.
	However, some schools are not well enough resourced to deal in that way with all the pupils who need this type of help and there is a great need for more financial support. Some education authorities have supported their behaviour education support team with behaviour improvement programme money to help them use multi-agency links to assist schools. Liverpool teams now include workers from the adolescent mental health services to provide expert help in tackling poor behaviour caused by mental health problems. Ofsted praised this work when it evaluated the authority. My noble friend Lady Sharp may have more to say about mental health later.
	However, there are occasions when all else has failed and the school wants to exclude a child. Here the key is to achieve the right balance between the needs and welfare of the child concerned and those of all the other pupils of the school. It is vital that the child should receive appropriate information about the process and be allowed to speak for himself at any hearing if he wants to. As the noble Lord, Lord McKenzie, said, it is not good enough to rely on the parents to speak for the child, because sometimes they are unable or unwilling to do so.
	Managed transfer to alternative full-time education is essential. Excluding a child from a school does not exclude him from his community. It is sometimes seen as an unexpected holiday and the child hangs around the school gates causing almost as much trouble as he caused when he was in the school, so proper provision is vital. It is also vital because of what he might get up to while he is out of school. In his latest annual report, David Bell, the Chief Inspector of Schools, said that most children in youth offending institutions have been failed by the education system. And yet the Forum on Prisoner Education pointed out in its evidence to the House of Commons Select Committee for its report due out next week, that the spend per head on an under-18 in a young offender institution is only £3,000 per year, whereas the spend per head on the education of a child in public care is £31,000. It is a lottery.
	LEAs need the resources to provide support to the school and be involved in behaviour programmes right from the start, before the problems become severe. As the Ofsted report stated:
	"Schools and other settings can be expected to solve most behaviour problems themselves but they cannot solve them all. They need specialist support from other services".
	Unless the schools themselves have rigorous self-evaluation systems to monitor their own performance and the LEAs also monitor the problems and the efficacy of the proposed solutions, nothing will ever be achieved.
	I look forward to hearing from the Minister how the Government propose to address that important problem.

Lord Lucas: My Lords, I very much agree with what was said by the noble Lord, Lord McKenzie of Luton, and the noble Baroness, Lady Walmsley, with regard to how many different things need to be done to improve behaviour in schools. It is not something which admits an easy solution—there are a lot of little things which can be done, a lot of improvements and initiatives which contribute.
	I hope that we can evolve a mechanism for spreading good practice around the school system. It is something that the Government have tried—in the case of Beacon schools—and then scrapped it a few years later. I am not aware that there is anything effective. Spreading good practice has always somehow seemed to be difficult to achieve. In a situation which is so much a matter of experience and learning how it is done from other teachers, to introduce an effective mechanism along those lines would be something quite useful that the DfES could do.
	I very much agree with both the noble Lords on the importance of curriculum. It is something I have banged on about for a long time. Our basic curriculum is of total irrelevance to many children who are expecting to end their formal academic education at 16. Even in key areas such as mathematics they are not learning things that they will need later. In many areas where their interest and imagination ought to be engaged, the curriculum has become dry and uninteresting and some sort of preparation for an imagined later academic life. We must recognise the damage it does and spend a lot of time sorting it out.
	I entirely agree with what the noble Baroness, Lady Walmsley, said about Jamie Oliver. Yes, let us catch that particular tide at the flood and push on to something that really would improve the whole national life. If kids came out of school expecting good food, we would suddenly find it possible to get good food when looking for a bite around the backstreets of London. But I do not know that the average meal of two sausages and baked beans in the Apsley room costs more than 37 pence. I suspect that the ingredient costs on that are pretty limited. It certainly induces lethargy.
	I do not want to dwell too much on those areas as they have been well covered. The only further thing I would like to say is that I disagree entirely with the idea of spending money on reducing class sizes. To say so many sensible things and then to go for that hoary old chestnut when all the evidence shows that that is an extremely ineffective way of spending money seems to be sad.
	We are becoming much better at accepting evidence of what works in education. There have been some big studies by Ofsted—for example, the Tennessee STAR project—which have demonstrated just how ineffective reducing class sizes is, even in the early years. Although it is sensible to keep a limit on these things, just from the point of view of managing the class, it really is not sensible to spend an extra 50 per cent of funds cutting class sizes from 30 to 20. There are so many better ways in which that money could be spent.
	I wanted to pick up one of the points that my noble friend Lady Perry made about not micromanaging. Let us look at how we can deal with the consequences of bad discipline in schools without trying to produce mechanisms that interfere with the decisions that they make. Let us see if we can allow schools to run themselves and judge for themselves what is best for their pupils as a whole, for the badly behaved pupil in particular and for the running of the school. That is fundamentally the best way for things to happen. There are a lot of things which need to be said about that, and I will come to it.
	Another thing I particularly wanted to pick up on was—going back to earlier debates—the Minister's vision of a local education authority as being there as a friend and support and adviser of parents and in this case pupils and what would need to be done to make the system work in that way. If we allow schools effectively to get rid of pupils as they wish, there will be consequences on the system outside. There should therefore be consequences on the schools if they choose to take that route.
	Schools will have different views on when they should expel a pupil. I know one secondary state school where you can get chucked out for being caught smoking within a mile of the school. I know others where you have to go to extreme lengths to get chucked out and the head will proudly say that despite persistent bad behaviour they have managed never to chuck a child out. I think that these differences between schools are important. They ought to reflect the way parents think the school should be run and the way the community thinks that particular school should be run.
	Getting rid of a child should carry with it responsibilities and obligations. My immediate view as to how to deal with that is that the school should lose double or maybe triple the funding for a child that it expels. That is the sort of cost that is going to be incurred elsewhere in the system if they do it. There ought to be a real incentive to do what they can before they get rid of a child. But if someone is really disrupting the learning of other people and the school has come to the end of its own resources in dealing with that then they should be able to take that decision relatively untrammelled. After all, if a school cannot cope with a pupil then that really is not the right place for the pupil to be.
	As the noble Baroness, Lady Walmsley, said, a lot of these kids who get into trouble have SEN. There has always been the argument that it should be the school that is doing better at handling children with SEN. I entirely agree. But if the school cannot, or if it has not yet learnt how to deal with inclusion properly and it if its headmaster is one of quite a large number of dinosaurs where SEN is concerned, then that kid would be better off elsewhere. The school is going to take some while to change and why should the child have to suffer that merely out of some matter of distorted principle? The child would be better off elsewhere.
	The other side of the coin is that once a child has left a school under compulsion it is enormously in the interests of society that that child is extremely well catered for. If we do not make that a positive experience for the child, we can expect a lot of trouble from the adult later on. The focus must come on to what PRUs do and how well they do it.
	I would like to see the financial arrangements for local authorities really focused on them running a good PRU system. A start will be the fact that it will carry double funding, which will come from the schools that have expelled the pupils. I would also like to see government support for PRUs that are well run. So if a PRU gets a good Ofsted report it should receive a substantial supplement in its funding. That would encourage local authorities to make sure that their PRUs come up to scratch.
	The best thing about an Ofsted report is that it is a good broad measure where you are not having to live with a succession of targets, but the school is being looked at as a whole. If there was a reasonably regular system of Ofsted reports for PRUs then a 50 per cent uplift in funding, or perhaps more than that, could be based on the results of the Ofsted report. First, this would give LEAs an incentive to run them well. Secondly, the combination of that and the funding stream from schools would mean an absence of the perverse incentive that exists at present, where PRUs are expensive and therefore LEAs are desperate not to see pupils excluded.
	LEAs are therefore not acting in the best interests of children because running PRUs well is a very expensive business. If they are established as well funded entities in the first place then it will be possible to turn them into something that is much more like the model which the noble Lord, Lord Filkin, has expressed himself in favour of.
	When the PRU turned a kid round we would want it to be able to place that child in whatever school was decided to be right. Although schools would be allowed to expel a child when necessary they would also be encouraged to take children out of the PRU system so that they could be recycled effectively. Something along those lines has a chance of working well. We are not that far away from it.
	Our troubles are the result of misplaced attempts to stop schools getting rid of pupils they cannot handle, which harm not only the pupil concerned but also the rest of the school. A system of perverse incentives on PRUs has resulted in their being not generally as good as they should be.
	It might be sensible to privatise PRUs or at least to put out to tender, as has been done with some prisons. We might find appropriate systems in the private sector; they certainly exist. When your kids get kicked out of some posh public school for being found with a packet of cannabis in their back pocket, there are places that specialise in picking them up. Those schools do not advertise themselves as such but they are good at it. There is a lot of experience in the private sector of running such institutions. It might be sensible to look at the issue alongside the model of putting some prisons into the private sector.
	I am not despondent about the state of discipline in schools but we must keep things moving on all fronts. Most particularly, we must understand that trying to force things on schools and to run things by diktat from the centre will always produce the wrong results for children and schools.

Lord Dearing: My Lords, I thank the noble Baroness, Lady Perry, for introducing the subject, and other noble Lords for the contribution that they have already made to my understanding of the issue.
	Perhaps it is fitting that I should begin by acknowledging the commitment that the Government have shown. As I recall, hundreds of millions of pounds have been devoted to the improvement of behaviour in schools. I welcome especially their firm three-year commitment of funding to schools so that they can plan continuing programmes to address problems of behaviour management and meet the requirements of children with special educational needs.
	The noble Baroness, Lady Perry, referred to Ofsted reports and the problems that we still have. However, Ofsted, in its latest report, said that the Government's behaviour improvement programme is proving effective in the large majority of schools in which it has been applied. But all of us would say that, however much commitment and progress there has been, there is still a major problem.
	I want to offer four thoughts on possible lines of action. Noble Lords who debated the recent Education Bill had a good deal to say from time to time on behaviour. One of our scores was on the section of the Bill dealing with the Training and Development Agency for Schools. It enjoins the agency to have regard in particular to the desirability of securing that the school workforce is well fitted and trained to promote a number of things. Our score was to get "behaviour" on to that list. I shall quote the full list:
	"to promote the spiritual, moral, behavioural, social, cultural, mental and physical development of children".
	I shall deal first with behavioural development in the context of the agency. My impression is that the PGCE syllabus is heavily congested. It would be in the interests of schools and nascent teachers if, in responding to the Bill, more attention was given to the development of students' understanding and capability of dealing with behaviour in the classroom.
	The second element of our list of aspects to which the agency is mandated to give particular attention is the physical development of children. Reference has been made twice to Mr Jamie Oliver, that heroic phenomenon who is penetrating school dining rooms and kitchens—all praise to him. Just before I came to the Chamber, I met two beautifully dressed young women of primary school age. When I addressed the subject of schools, the name that brought them to life was Jamie Oliver's. I am not sure whether any of our names would provoke such a response. They knew all about him—good luck to him, for the sake of our children.
	The noble Baroness, Lady Walmsley, referred to the 37p cost of a school meal. The Times has reported that the Scottish Executive proposes to spend an extra £63.5 million on school meals over the next three years. Maybe there is scope for the extra 13p proposed by the noble Baroness in our schools. It does not sound a lot.
	The noble Baroness referred to the nexus between what we ingest and how we behave. The Times nutritionist, Jane Clarke, said:
	"Changing the food we eat has an enormous impact on how we behave and live, but its effect is even greater on children. Numerous studies have uncovered strong links between additives and preservatives in junk food and hyperactivity".
	I am therefore grateful to notice in the Secretary of State's recent remarks and in other things coming from the Government that the issue will be addressed. The Secretary of State's ambition is to raise the bar against which standards of school meals are measured. I understand that the Government intend to come forward with proposals. Those are very relevant to what goes on in the classroom, especially after lunch.
	I want to trespass into two areas, one of which is strange country for me: the cultural and social development of children, which is dealt with in the Bill. We in this country, and perhaps in the United States, seem to have concentrated on the concept of the individual; selfishness, as referred to by the noble Lord, Lord McKenzie; the self; and the individual's rights and development. The issue of respect, which is so important in the classroom, has become a pejorative term that is read as "subservience" and is not an okay word. However, in other countries, including Japan, there is less acute emphasis on the individual and more on the individual's responsibility to the group and contributing to the well-being of the class and the education of members of your group. Perhaps the fact that we have developed a culture of self-interest rather than group responsibility has been part of the genesis of the problem.
	I remember listening to Peter Ustinov, shortly after he had been made chancellor of the University of Durham, addressing the rectors of the universities of Europe. He said: "In this cathedral of Durham, you Christians talk a lot about love. I would like to talk about respect". His speech was devoted to the value of respect.
	When I went on an exploratory visit to a school, where I chatted to pupils and teachers, I was impressed to hear more than once from pupils and staff, "This is a happy school. We care about each other". Those words, like Peter Ustinov's, have remained in my memory.
	Citizenship is now part of the school curriculum. Perhaps it would make sense, in developing citizenship as part of the curriculum, to begin by talking about what it is to be a good school citizen and to contribute to the life of the school, which is a community. It is a small community but teaching pupils how to be effective and to contribute to it is a realistic way of introducing a subject that might otherwise seem remote.
	With some anxiety, being in the presence of the right reverend Prelate, I refer to the second great commandment. Perhaps one might approach RE in schools with the dictum, "We care for each other", because it is about loving each other.
	It is a cultural issue. While you cannot import foreign culture—say, Japanese culture—it is worth researching other cultures and their impact on behaviour to see whether there are elements that we can take on board when considering how to introduce some of the thinking, caring and respect for others on which civilisation is based.
	My last point concerns the transition from primary to secondary school. If a child by the age of 11 or 12 is well behind, there is a serious risk that when that child goes to secondary school he or she will be lost. The child will regress, having left the security of a small school and the class teacher. It is difficult for children to go into a strange large establishment without the class teacher who knows them intimately and to face the many other kids who are older than themselves.
	I am worried that such children often regress, and as they do so, their behaviour deteriorates. They are frustrated because they are not succeeding, and they express that through their behaviour. The behaviour established in school reflects all later behaviour in life, such as attendance, bullying and a disregard for others.
	We must anticipate problems by investing in those children before they leave primary school. Perhaps they should stay on an extra year, or perhaps that is an outrageous suggestion. We ought to invest in them to give them a better chance of making a successful transition. When they have gone to secondary school, should we not make sure that we help them at that stage? We are prepared to invest in our ablest young people through their university life. For all our sakes, and for the well-being of society, we need to invest in those children to help them to come on board in language and arithmetic so that they can engage.
	I was talking to one of my neighbours whom I respect. She talked about her own child 40 years ago and how in a sixth form entry school there were two forms—one for those who were the least successful, who had their old primary school teacher to relate to and help them. The noble Lord, Lord Lucas, said that smaller classes are not the idea, and the noble Baroness, Lady Perry, was nodding. I shall not push for one solution or another, but we need resources to help the children in secondary schools who are in danger of losing out for life. We have a terribly important responsibility to those children.
	We should invest in the PGCE course on behaviour. All praise to Jamie Oliver. May the Government find an extra few pence, as the Scots have done. We should think about the cultural issue and research it. Above all, we should think of the kids who are losing out, especially as they move from primary to secondary school. We should give them a real second chance.

Lord Elton: My Lords, we are all in the debt of my noble friend for staging the debate, if only for the speech that we have just heard.
	The noble Lord, Lord Dearing, said some exceedingly important things, which I suspect go beyond our brief this afternoon, although they overlap it very powerfully. It needs to be heard by more people than the Minister and his Whip, and indeed by more people than the Government. He addressed the question of the sea change that has taken place in this country since the last war. I doubt whether I would advocate research into other cultures. He suggested as the distillation of what is needed the second great commandment, which is:
	"Thou shalt love thy neighbour as thyself".
	That has been embedded in our culture for 1,300 years, and it is what we are losing. We need to investigate ourselves to find out why we are losing it. Then we come to the question of respect—or responsibilities, as I put it. Children often learn from their parents what their rights are, which is not new.
	I taught for a number of years in a secondary comprehensive school with 1,500 children in a slum-clearance estate in Nottingham. I remember one youth getting a bad report from his teacher because he had not done his homework. When I asked why not, he said, "Well, my father is back". When I asked where from, he said, "He's a merchant seaman and he's been away for three months". I said that, of course, he should give him a welcome back, but I got the same excuse the next day and the next. When I asked what was going on, he said, "My dad won't let me work out of hours". That seaman actually came and took his coat off to the house tutor and threatened to punch him because he expected his son to work overtime without pay. There is a long-running culture of rights in this country.
	However, I digress. I apologise if my speech seems somewhat fragmented. It was to have been pulled together this morning in the quiet hours between breakfast and lunch, but unfortunately a dramatic domestic emergency resulted in me working as a plumber's mate from 9.15 until one o'clock. I therefore have to pull it together as I go.
	The first requirement of improving children's behaviour in school is to have them in school. It worries me that the Motion does not embrace the children who are not in school. The Minister will properly give figures on the reduction in truancy and he will talk about the Five Year Strategy and the deployment of truancy sweeps, which have been going on for the past 20 years, as a means of combating truancy. But they look for children who are on school rolls.
	In the short time I have had to prepare, I managed to meet a couple of school-aged children on Saturday who are not on any school roll. One was given a dispensation last November. The child has a doctor's certificate saying that the violence in the school induced unacceptable stress levels so his patient should be excused. That has not been followed up by any other provision. The other child has not got on to any school roll since his transition from primary to secondary age. The reason given by this boy was that his brother created such mayhem in all the schools in the district that as soon as his name was seen, the school declared itself full.
	That is anecdotal. But the description in the Evening Standard yesterday of what is going on in some streets in Brixton makes one wonder how many kids are outside the system altogether. They are not known about or counted in the statistics. I hope that the Minister will take that thought away and consider what surveys can be carried out to correlate the known number of children of school age revealed in the census with the known number who actually receive full-time education.
	I turn to the DfES report on the Five Year Strategy for Children and Learners, which was brought out in July last year. One expects it to take a sunny view because it is a government document. I have been in government and know of the sunny view that one takes when one is making a report. I endorse what has been said by others that there is a heck of a lot of first-class work going on in British schools, and I do not want to discount that.
	Skipping through this document, the chapter on primary provision has a helpful shoulder heading:
	"Partnership with parents and the community",
	which recognises that schools are part of the community and that if they are not, they will fail. It goes on to the school profile, which is how a school presents itself to the community. A series of bullet points cover the profile, one of which half way through states,
	"will include information about: school standards—with data about attainment, progress, attendance in comparison with other similar schools . . . How the school serves its pupils . . . The school's own assessment of itself . . . and the most recent Ofsted judgment under those headings . . . What the school offers to enrich the curriculum . . . What the school offers to the wider community [and] The school's priorities for future improvement".
	No mention of behaviour is made, and there is no mention of a whole-school behaviour policy.
	The one thing I recall above all others from chairing an inquiry for a former government many years ago into discipline in schools was that when it was analysed, a school's discipline policy would not work unless everyone in the school was involved in it. That meant, first of all, the teaching staff, and then it meant the non-teaching staff. The janitor must know about the rules if he is to stop bad behaviour in the toilets or behind the bike shed. Dinner ladies need to understand the rules. Noble Lords may raise their eyebrows, but two of our team were present in a school dining room when an admirable and robust school dinner lady was serving the food while a couple of kids got into an argument. That lady, by her sole well-intentioned and vigorous efforts, provoked a riot which could be quelled only by the arrival of the headmaster. So all members of the school have to know the rules—and that includes the children.
	If children feel that they own the school, they will look after it. Similarly, if they feel that they own the behaviour policy, they will abide by it. That was brought forcefully to my attention in Norway where, following the advice of the noble Lord, Lord Dearing, we went to see how things were done there. Norway was tackling the problem of absorbing its first immigrant and refugee children into the community. The school we visited was spotless and the children delightfully well behaved. But the first thing one saw was a row of national flags over the front door. Each time a child from another beleaguered country came to the school, its national flag went up. Thus the child felt that this was his school with his flag, or her school with her flag. As a result, the school enjoyed beautiful attendance and was very well run.
	I therefore ask the noble Lord to retrieve, if it has been lost, or to enforce if it has not, the idea that a school can be properly run only if everyone involved, including the parents, has a hand in the behaviour policy. If the parents do not know what is and is not allowed, they will believe what their children tell them. My years as a teacher showed me that children relate a very different story about all sorts of things, particularly about other people's pocket money and what other parents allow their children to do in their spare time.
	The behaviour policy ought to be in the school profile and it ought to be the subject of meetings with parents. In my view, the difficulty lies not in setting it up, but in renewing it to take account of the flood of new children coming through year on year. They have to be involved as well.
	On the secondary years, the report confidently asserts in paragraph 5 of chapter 5 that:
	"Both behaviour and attendance are also improving—with fewer violent incidents and fewer days lost to truancy".
	I shall come back to those, but the report does recognise the importance of the time of transition from primary to secondary school. For the moment I want to go beyond what was said by the noble Lord, Lord Dearing, who was most encouraging and full of good ideas. Some of us have forgotten that primary schools are usually small. Children are accustomed to sitting in the same classroom with mostly the same teacher, day after day, teaching them everything. They hang up their coats on their pegs, they sit down at the desk which is theirs for the year, and at the end of the day they go home. That is an established and reassuring pattern of behaviour.
	Suddenly children come into a huge place that looks like a factory, sounds like a starling roost, and offers no clue to where anything is. They find that they have to go to six or seven different rooms and have up to eight teachers for the different subjects. They are expected to be in the right place at the right time and will be in trouble if they are not. That is a very frightening experience. Those children are physically the smallest people in the school, they are the most inexperienced, and they are suddenly on their own. That puts a lot of children on the defensive against the entire system. Their defence mechanisms are in place so that their response to a teacher is not to see them as helping but as criticising. Teachers become "them" and the rest of the kids are "us". That is the first dangerous breakdown in communication in the classroom.
	This is all about communication. The noble Baroness, Lady Walmsley, was so right to stress the need to integrate schools in the community, and to say that children take their time. I am afraid that I am taking too much time. In the four minutes I have left, I shall junk much of what I intended to say in order to cast a worried eye on the news that the NAHT has withdrawn from the workload agreement talks.
	If noble Lords want a different view of what is going on in schools, they might look at a publication by the Faculty of Education at the University of Cambridge commissioned by the NUT entitled A Life in Secondary Teaching: Finding Time for Learning. The report reflects constant complaints. Teachers are supposed to have four or five free periods a week, but at least two are used to cover for teachers who have not turned up, while the other two are used to deal with the fallout from bad behaviour by the children who have been taught by supply teachers in other classes being covered. Out of,
	"4 or 5 periods a week of non-contact time, currently at least two of these will be taken up covering for absent colleagues. The remainder . . . will often be used to deal with disciplinary issues".
	The report was commissioned to assess the impact of recent government initiatives on the professional lives of teachers in secondary schools in England. The key themes are set out, of which the most obvious is the lack of time for reflection and professional space. Another is class size, while the issue of the most overriding concern is pure pupil behaviour. That will not be a surprise to noble Lords. I illustrate the point with one or two quotations:
	"'a constant battle just to be allowed to teach', (Science Advanced Skills Teacher, 15 years' experience) . . . 'One of my tutors coming to me really, really upset. "I could not teach yesterday". 'Two pupils had disrupted her time so badly she couldn't teach that lesson. Two children can have that much impact on the learning of 26 others'".
	The Government need to look at their inclusions policy and to consider what was said by my noble friend Lord Lucas on how to deal with difficult pupils.
	The basis of all this is the proper training of teachers. I was shocked by a huge survey we carried out 16 years ago on new graduates from teacher training institutions to learn—after we had been told by all the colleges without exception that they taught classroom behaviour management as a subject or cross-curricular theme—that 98 per cent of their graduates said that they had received no such training at all. I discovered that when I taught in a teacher training college. I lost their attention when they faced their first teaching practice the following week and I discovered that they had not had any training in behaviour management. I had not been to a training college, but having taught for a number of years, I spent my history lecture periods teaching them how to cope. That training really ought to be standard practice. On a PGCE course, which is so much shorter, it must be included or be provided as an extension.
	My last remark is that some people teach brilliantly, some well, and some cannot teach at all. Those people need an escape hatch. Nothing is closer to my idea of hell than someone realising that he can pursue gainfully his qualified profession only by being ridiculed and belittled by a class of 15 year-olds. He should be supported by being given an alternative placement—but not in the same school. When you have lost your reputation in a school, it is lost for good. What is lost is passed on to the generations coming in: "He is good for a lark". Such teachers must go into a new environment and be given support. But if it does not work, there must be some way of easing such people out into the community where they can contribute positively rather than continue in a school where their contribution is only negative, at the cost of their own misery and damage to the children.
	Teaching is not just work: it is a vocation. It is a glorious profession and a pastoral profession. I am happy to have spent some time in it. I honour those who are in it now, but my goodness they need help. I hope that the Minister can give it.

Baroness Sharp of Guildford: My Lords, I would like to join others in thanking the noble Baroness, Lady Perry, for introducing a timely but also extremely interesting debate. It seems that around the Chamber there is a good deal of agreement that there is a problem with behaviour in schools. Many noble Lords have referred to the Ofsted report, Managing Challenging Behaviour, which came out at the beginning of the month.
	In that report Ofsted defines bad behaviour as either physical violence or verbal aggression: verbal abuse against teachers or other pupils; outbursts of temper; bullying behaviour; and defying teachers' authority. Her Majesty's Chief Inspector of Schools picked up low-level disruption as the most common form of bad behaviour in schools. He noted, as did the noble Baroness, Lady Perry, the extent to which since 1997 the proportion of secondary schools where the level of behaviour was judged to be good or excellent had fallen from 75 per cent in 1996–97 to 68 per cent in 2003–04.
	Interestingly, it is only in the past two years—in 2002–03 and 2003–04—that we have seen a fall: it fell to about 72 per cent in the former and there was another fall in the past year. Looking at the figures I noted—as did the noble Baroness, Lady Perry—that those pupils aged 14 today were six or seven in 1997. Those are the children who have benefited from the literacy and numeracy strategy, but perhaps they have suffered from the degree to which our schools have been dominated by an over-rigid curriculum and too much teaching to the test and not enough creativity.
	We need to think about that issue. I remind the noble Baroness, Lady Perry, that it was her government who introduced the national curriculum and appointed as Her Majesty's Chief Inspector of Schools Mr Christopher Woodhead, who tended to create and insist on such rigidity. Since he departed from that post we have seen chief inspectors who have encouraged schools more towards creativity.
	There is also good news, as my noble friend Lady Walmsley noted. If we look at primary schools, the picture is completely the other way round: the proportion with good or excellent behaviour has moved up from 79 per cent in 1996 to over 90 per cent today. There has been a constant improvement.
	We should remember that a majority of schools—even 68 per cent means two-thirds of our schools—show good or excellent behaviour. Nevertheless there is an element of worry that there has been deterioration in our secondary schools. We also know that one-fifth of exclusions are the result of bad, disruptive behaviour; that boys are 10 times more likely than girls to be excluded from schools; and that challenging behaviour comes especially from boys aged eight to nine and 12 to 15. Those boys often have a learning disability, which is termed in education jargon "EBD"—emotional behavioural disorder.
	What should we do about it? The Ofsted report quotes an earlier report, the Elton report of 1989—I wondered whether the noble Lord, Lord Elton, had some hand in it—which states that 80 per cent of disruption in schools is,
	"directly attributable to poor classroom organisation, planning and teaching".
	The Ofsted report states,
	"In most, but not all, of the settings visited in this survey, it is recognised that effective teaching and learning is a key to encouraging good behaviour and engaging those pupils who have the most difficult behaviour".
	My noble friend Lady Walmsley indicated from her own experience how a good teacher can hold a class's attention. The Ofsted report quotes various examples of ways to manage a difficult child in a class. As the noble Lord, Lord Dearing, mentioned, we dwelt on that issue at length in our discussions on the Education Bill earlier this year. We passed amendments in this House asking for two things: first, that Her Majesty's Chief Inspector should report both to the Secretary of State and to the schools themselves and should make note of the behaviour and discipline patterns within the school.
	Secondly—this answers a little the question raised by the noble Lord, Lord Elton—we also requested that in changing the name of the Teacher Training Agency to the Training and Development Agency for Schools its role should be to teach how to manage behaviour in the classroom among other matters. To some extent we have already made a move in that direction.
	Referring to factors that affect managing behaviour other noble Lords have inevitably come up with "Jamie's School Dinners", which is important: not just school dinners but sometimes school breakfasts. I am amazed and appalled by the number of children who come to school and have been asked to buy on the way to school a bag of crisps and a can of Coke for their breakfast. As everyone knows, that is not the best breakfast from which to expect some attention span in the morning.
	All teachers will tell us that if they have difficult classes to teach, they teach them in the morning because the children have a better attention span in the morning. School breakfasts as well as school lunches are therefore an important part of answering the problems that lie before us.
	We have also discussed the inclusion agenda and special educational needs. We talked about them at length on the Education Bill and we are all agreed that while the Government's inclusion agenda and the notion that children with special educational needs should as far as possible be included in mainstream schools, nevertheless, unless the resources are there to cope with that requirement, it is a bit of a pipe dream and there are occasions when we need to take children out of the school environment because they disrupt others.
	Disruption is the big problem. But then we come on to exclusions. When we have discussed these issues, all noble Lords have recognised that exclusion is not the answer. Taking a child away from a school and the stability of that environment—particularly a child whose home background may be very turbulent—can cause further disruption in their life. Therefore, where it can be used, the internal pupil referral unit within schools has its advantages. I will return to that point in a moment.
	We need to consider extremely hard whether it is essential to pursue exclusions. The noble Baroness, Lady Perry, quoted the case of appeal panels turning them down, but there is always a balance between the best interests of the child and the best interests of the school. There are always occasions when, if a child has hit out and hit out at teachers, normally they cannot be contained back within the school. But there are also occasions where, if you can bring them back, it is right to do so.

Lord Elton: My Lords, does the noble Baroness envisage any special arrangements? Taking a child back into a school which has said it does not want the child is extraordinarily difficult to handle in the classroom and, indeed, in the playground. The child will feel that he has won a victory over the school.

Baroness Sharp of Guildford: My Lords, the noble Lord is absolutely right. I would start by not getting myself into that situation. There is clearly a gradation in handling these issues. In an internal pupil referral unit, the child is taken out of the class and works on a one-to-one basis, or in small classes, with someone within the unit. The child is then eased back into a classroom situation. But once there has been a permanent exclusion it is extremely difficult to move back from that situation.
	Last week we debated the Tomlinson report and the 14 to 19 curriculum. The difficulty faced by the 50 per cent of students who we do not aim should now go to university is that the GCSE and A-level curriculum is seen as being the right route for secondary schools and yet often it is not the right curriculum. The Tomlinson proposals cover a wider and broader curriculum and contain a different emphasis. In particular, the report proposes that greater emphasis on some of the more vocational subjects perhaps has a place. When one looks at the disillusion with schools of children in the 12 to 14 age group—and 12 to 14 or 12 to 15 is one the key age groups—we need to consider whether we are offering these children the right curriculum.
	We can be tough on discipline and we can be tough on teaching; are we also being tough on the causes of bad behaviour? Four out of 10 children experience family breakdown during their school lives. The noble Lord, Lord Dearing, referred to the problem of what I call the "me" society. At a time when, on the whole, people lived in communities which incorporated extended families, children who felt unhappy were often able to go down the road and talk to their grandma or aunty. Today they are often very alone; often there are not even that many siblings to talk to. This loss of the extended family is an important issue which reverberates back to the whole question of community and what is a community.
	One in four children are still brought up in poverty. The Government have done a great deal in this area but we should not forget that 55 per cent of children in one-parent families live below the poverty line.
	The poor mental health of parents also affects children. Approximately one in 10 children experience problems with their parents' health—either their physical health, their mental health or drugs problems of one kind or another.
	Four out of five children who show behavioural problems at age five go on to develop anti-social behaviour later on. Forty per cent of seven to eight year-olds with emotional, developmental and behavioural problems become delinquents at 14 to 15. Ninety per cent of these recidivist teenage delinquents—in other words, those who, having had problems earlier, go on to have problems later—had a conduct disorder that was diagnosable at seven.
	One in 10 children—10 per cent—have mental health problems severe enough for professional input, and yet fewer than one in five receive any advice. We have to be aware that professional advice is just not available to these children.
	I want to conclude by referring to a programme which is attempting to answer some of these problems. It is clear that if we are to nip the problems in the bud we have to get in early. It is in the primary schools that these disorders show themselves and, if they can be diagnosed, we need to pay attention to them.
	A programme called the "Place2Be" concerns the placement of counsellors in primary schools. It has been run on a pilot basis since 1994 and has been gradually rolling out. Its advantage is that it places a counsellor within a school, who works with the school and the school community. Under the Place2Be programme, the counsellor is given a room where the children can go and talk to the counsellor during lunchtimes. When they need to be withdrawn from class, the counsellor takes the children out of class and gives them the individual attention and tuition necessary. But the children have this open access. It is their room; it is the Place2Be.
	The counsellor works also, if necessary, with the parents. Following through and talking to parents, being peripatetic and going to see parents—because often parents will not come into the school—is a very important part of the programme. As I said, essentially it places a counsellor in primary schools.
	Perhaps I may give a nice quote from one of the children who experienced this Place2Be programme. The child said:
	"Well I think the place to be is a good idea because when you want to tell somebody something and you feel scared, if you go to The Place2Be you can talk about anything you want and nobody will no execpt the lady.
	"I think its help ful because you go like fighting and come back laughing and Jokeing To gether. You have made me happy".

Lord Hanningfield: My Lords, I welcome this opportunity to speak from these Benches on an issue which is of huge significance not only for young people but for parents, for teachers and, indeed, for society at large.
	I begin by congratulating my noble friend Lady Perry on introducing this timely and important debate and on her powerful and constructive contribution to today's discussion. I also thank my noble friends Lord Lucas and Lord Elton for their thoughtful contributions.
	As always in education debates we have had a fascinating contribution from the noble Lord, Lord Dearing, and I should like to make a few comments about some of the points he raised. I am not sure that the Japanese culture is akin to ours, but it is an interesting suggestion.
	I agree with much of what the noble Lord said. I have had a great deal of experience of what happens in many European schools and certainly something has gone wrong with the behaviour in our schools when compared to most of our European colleagues. So certainly we have something to learn from other countries, a point which has emerged from one or two other discussions. We concentrate a great deal of our debates on what happens in this country, but if other countries do not have the behavioural problems that we have—and the situation is getting worse—then certainly there is something wrong here.
	Several comments were made about the Jamie Oliver food programme. Of course, everyone knows that Jamie Oliver comes from Essex and I wish to claim credit for that. It was a fascinating programme and we would all like to see improved school meals and children adopting healthier and better diets.
	At the moment in primary schools there is a big take-up of food. Most children in primary schools have food and we know that they are better behaved. We have been told that it is the food children eat that causes many of the problems but, of course, in most secondary schools they do not eat the food; there is only about a 40 per cent take up of meals. Most of the young people in secondary schools, unfortunately, like to go down to the shops for their coke and their crisps; they do not want to eat the school meals. Somehow we will have to persuade them to do so. Perhaps the Jamie Oliver approach is the way to persuade them.
	But certainly at the moment the children do not eat a great deal in secondary schools; they like to go out into town and do other things rather than go into the canteen and eat school meals. Unless we tie them up, I do not know how to get them to eat school meals. However, the future of food in schools is a matter for another debate.
	A lot of European countries do not provide meals in school. They start earlier and finish early in the afternoon, and pupils have most of their food at home, so I am not sure whether food is the answer.
	It is now the responsibility of governors and schools to provide meals. That has changed in the past few years, under this Government. School meals have to come out of the money provided to the school. It is nothing to do with the education authority, but comes out of the school's budget. More money allocated to food would mean less for teaching or equipment. Schools would need more money if they were to change their food regime. Anyway, that is enough of food for today.
	As others have said, there is a growing concern about behaviour which is seen to be unacceptable. It handicaps the right that pupils have to expect to be taught in an environment that is free from intimidation and fear. Teachers deserve the right to get on with their job without threats to their well-being and physical safety and worries about the school environment.
	I should like to highlight some of the figures given by my noble friend Lady Perry and the noble Baroness, Lady Sharp. New figures from the Office for National Statistics show that there were more than 17,000 exclusions for violent behaviour in just one term in 2003, 4,000 of which were for attacks by pupils on adults. As my noble friend Lord Elton said, this might be an underestimate. How do we know? Sometimes schools fail to report the full figures for fear of being labelled a failing school.
	In 2002–03 there were 9,290 permanent exclusions from all schools in England, which is 0.12 per cent of the school population. Most were from secondary schools; today's discussion has highlighted the real problems in secondary schools. Exclusion was most common among 14 year-olds, while 82 per cent of all those banned from schools were boys. We talked a bit about that problem today.
	One-fifth of England's secondary schools report problems with gang culture and poor behaviour among a rising proportion of pupils. Poor discipline in schools is also having a serious and detrimental impact on the teaching profession. Several speakers have mentioned our debates on the Education Bill, when we talked about the number of teachers expected to leave the profession within five years, according to a survey carried out by the General Teaching Council. They are doing so because of threats and poor behaviour in the classroom.
	NASUWT has also carried out a survey on abuse against staff in the east of England, which found that 287 incidents occurred over 30 days in 2002. The union says that if this level of abuse against teachers were to be applied across the country, it would mean an incident taking place every seven minutes.
	The Association of Teachers and Lecturers believes that the number of assaults is on the increase and that attacks on its members increased fivefold between 1998 and 2002. So there is a real problem. I know that the Minister will repeat some of the things he has said before about continued investment and this report and that report, but there is a problem which is getting worse and we must do something about it.
	We have talked a lot today about the longer term. The noble Lord, Lord Dearing, made a very valuable contribution on longer-term thinking, but we have to do something now. We must sort something out fairly rapidly if the situation is not to deteriorate.
	One of the first things I did in public life was to be involved with a division executive—a sort of small local authority—and sit on a school attendance panel. The school welfare officers tended to be retired policemen who acted as mentors to both the young people and their families. They solved a lot of problems. Doing away with that sort of thing over the past 30 years has not improved matters. Many families and young people need individual help. I agree that the curriculum needs to be thought about, but some of these young people do not need the same curriculum as others. They need particular help. Thirty years later, I do not think that we have solved anything, despite all the money that has been invested.
	I certainly would not claim that the breakdown in school discipline started on 1 May 1997 with the election of a Labour Government. But it has got worse since then, with no one able to stop it. Some new thought has to be given to the problem.
	Some suggestions are likely to make the situation worse. We all agree that these young people need the right treatment, but someone—I think it might have been the Prime Minister—suggested recently that all schools, even the most popular, should take their fair share of pupils excluded by other schools as an attempt to stop disruptive children being concentrated in so-called sink schools. We would all agree with that, but sharing these children among all schools will not help; it will spread the problem rather than address it. Parents, teachers and pupils do not want such a policy.
	If we are to tackle the problem, we must trust the professionals more than we do. We have given schools more power with regard to finance and day-to-day operation but then we impose other things on them and tell them what to do. Several contributions today have been along those lines. Given the resources, I think that schools could do more themselves.
	Several people commented on the links between primary and secondary schools. In my experience, that has improved 1,000 per cent over the past few years. Most secondary schools invite primary schools in; they have induction days, show the children the classrooms they will be in, have them for two or three days and have established good feeder links with primary schools. But as we have seen from the figures, problems tend to arise when the children are about 14, when something goes wrong. It does not happen with 11 or 12 year-olds. I do not think it has anything to do with the contact between primary and secondary schools.
	We have to give teachers back a lot of what we have taken away from them by increasing red tape and regulation. Heads and governors should again enjoy more freedom to run their schools—not just the financial freedom we give them—which they have lost because of interference from outside.
	Responsibility for maintaining school discipline should rest with heads and governors, not with outside bodies. A future Conservative government would abolish the independent appeals panels, as we suggested doing in debates on the recent Education Bill. We feel that imposing young people on a school where the situation has broken down does not help at all. I think that the noble Baroness, Lady Sharp, agrees with that to a certain extent. There are grades of exclusion, but most pupils who are finally expelled from school are pretty serious cases. Most schools do a tremendous amount to try and contain these youngsters and exclude them only as a very last resort. To put those youngsters back into that school does not help matters at all.
	My noble friend Lord Lucas put forward some ideas which were very much in line—as they should be—with Conservative policy. We would invest another £200 million in what we would call turnaround schools or turnaround units in other schools. We need to invest more money in that area. As I said earlier, the individual young person needs more help and support in coping with the situation and becoming a proper part of the community again.
	We would also legislate for new statutory protections for teachers, including a right to anonymity when facing an allegation of abuse. How teachers cope with this has been a problem in recent years. There have been several false accusations against teachers, which continue to underline the problem.
	We are in the weeks before a general election, when this issue will be big. As I say, it did not start at the beginning of a Labour Government, but I have not really seen any answers to the problem, and I hope the Minister will give us some today. It will be a big issue for any future government, because, as we have all said today, these young people only have one education. It cannot be right that a few people can disrupt everyone else's education. Those young people who cannot cope must be helped to deal with that situation.
	I hope the Minister will come up with some good answers this afternoon. It has been a fascinating debate, and I would again like to thank my noble friend Lady Perry for presenting it.

Lord Filkin: My Lords, I agree that it has been an important and timely debate. When we scrutinised the Education Bill, we discussed how behaviour, discipline, attendance, respect for others and respect for order and society's rules and norms all mattered. That was central to our thinking.
	I must start, with some regret, by addressing some of the assertions made by the noble Baroness, Lady Perry. I will do this in a fuller note as it is important that the truth of some of these situations and statistics is on the record. No doubt some of her figures were true, but they were carefully selected. I shall rapidly give your Lordships a picture.
	It is not true that there are rising numbers of exclusions. They have reduced by 25 per cent since 1997. It is not true to paint a picture of heads out of control as a result of policies that made others able to force pupils back into their schools when the heads do not want them there. There are more than 6 million children in our schools, 10,000 of whom were permanently excluded. Only 149 were reinstated as a result of an appeal mechanism. To construct a national policy on 149 cases is a nonsense, unless one believes that in every case it was evident that the appeal panel was wickedly misguided and wrong, and in all cases the head was absolutely right.
	That is not to say that we are not clear on the importance of headmasters having the right to manage their schools. I hoped that I had made that explicitly clear in the earlier debate on the Motion for Papers. It is not true that we have undermined the confidence or authority of teachers. I shall put in my letter the evidence to support that.
	It is not true that the proportion of teachers leaving the profession has doubled, as I recollect the noble Baroness, Lady Perry, said. The figures have been largely static; in fact, they are slightly declining. Neither is it true that 17,000 pupils were expelled because of violence, as the noble Lord, Lord Hanningfield, said. The correct figure is 4,200.
	Violence on any adult in school is appalling, and needs to be treated firmly and strongly by the school authorities, backed up by the governors. In the latest year that we have, however, only 148 injuries to teachers were reported to the Health and Safety Executive. That is 148 too many, but we have over 6 million children in our schools. Let us not try, for I do not know what reasons, to create a public impression that this is a rampant problem grossly out of control. That is immoral.
	We have 40,000 more pupils back in the classroom each day compared with 1996–97, as a result of our onslaught on getting more attendance in school. That is 40,000 more pupils being taught every day. Our truancy levels of less than 1 per cent compare well with those of our European competitors. Our average attendance level of over 93 per cent is the highest on record. Behaviour is satisfactory or better in well over 90 per cent of schools inspected by Ofsted. I pay tribute to the measured way in which the Liberal Democrat Front-Benchers talked about the reality of the situation and did not attempt to exaggerate or cheapen it.
	When we look at the stakeholder tracking survey, we see that only 5 per cent of heads and teachers tracked felt that behaviour was poor. The general trend in perception indicates improvements in pupil behaviour over the last three years. Currently fewer than one in five across all groups believe that it is getting worse. Nearly nine in 10 teachers said they felt supported in improving behaviour in their classroom.
	The noble Lord, Lord Hanningfield, and others commented on international comparisons. I asked for the evidence on that in preparation for this debate. The OECD survey for 2001, the latest data we have, shows that the UK is better than OECD averages on five out of six indicators of disciplinary climate in school. We are better than the OECD, not worse. It is not true that England is worse at managing this problem, which is one that all OECD countries face.
	The noble Baroness, Lady Walmsley, was absolutely right. We must not overestimate the problem—the nature of which she accurately described: a mixture of low-level disruption and some appalling high-level incidents of low frequency. But the fact that we must not overestimate it does not mean for a second that there is not a problem or that there is not more to do. I am at one with the House when we discuss that. The problem, though, is not as presented, with the use of selected or, in some cases, I would assert, inaccurate statistics put forward in the opening of the debate.
	I turn to what we, local authorities and schools are seeking in practice to do about this serious issue. One of the first issues is that the problem is more strongly concentrated in areas of high deprivation. That was marked. There is not a total correlation, but it is significant that there are schools with high levels of free school meals—a good enough indicator of deprivation for these purposes—which nevertheless manage to have good records on behaviour and discipline. That tells us that we do not need to fall into a determinist trap of believing that nothing can be done about the problem—it is a product of hard environments and a school environment cannot manage it. I pay tribute to those schools and teachers in some of the most difficult areas where they nevertheless manage to create a climate where their pupils can learn and do well.
	The noble Baroness, Lady Walmsley, talked about the importance of stimulating the presentation of the curriculum. She is right. The noble Lord, Lord Lucas, is also right to remark on the importance of an open mind about curriculum reform and of recognising that this is a story that needs to move on.
	The noble Lord, Lord Elton, gave us a tragic example of the importance of improving the skills agenda, so that he no longer has to work as a plumber's assistant rather than preparing for our debates. We are with him on that, as we want him to concentrate on that preparation. I suspect that he has a unique skill there, though perhaps less in the plumbing field—but perhaps I am treading where I should not.
	The noble Baroness, Lady Walmsley, also talked about the use of some of the BIP money to develop alternative curriculums. I will come back to that.
	Some schools appear to be succeeding. We ought to understand and learn from them, because they give us pointers to what LEAs, other heads and leadership figures and the Government themselves can do to help those who are not succeeding get better. Ofsted tells us that the factors contributing to positive behaviour include a high expectation of pupils, challenging lessons and effective classroom management. The consistent application of behaviour policy also matters.
	I have not read all the Elton report in preparation, but I have read some of it. I pay tribute to the noble Lord, Lord Elton, for the report. It is impressive that a report written in 1989 is still seen by Ofsted as expressing the best overall picture of the issues around behaviour and the challenges faced by teachers and the educational system. We have been well served to have him contributing to this debate.
	The noble Lord is right that all should have ownership of the behaviour policy—"all" encompassing both all pupils and all of the teacher workforce. He is right, too, about the importance of developing an ethos in the school where people know that discipline is their responsibility and has to be treated properly. I agree with the comments about this being part of a discussion about an engagement between pupils and schools, because we know that behaviour matters as much to parents as results do. They are concerned about getting better behaviour in schools.

Lord Elton: My Lords, I thank the Minister for his very kind remarks. Am I right, having heard it rumoured, that the Government are considering formally training non-teaching staff at schools in the management of pupil behaviour? That would be very welcome, though rather overdue.

Lord Filkin: My Lords, I shall not chance my arm on a glib response. We will test it. I know that as part of school workforce reforms generally, we are considering the wider development of training for others than teaching staff, so I am pretty certain that the answer is yes. But I shall double-check that and drop the noble Lord a note.
	What have the Government been doing to help schools to promote good practice? Clearly, there is a responsibility on Government as well. The key stage 3 strategy seeks to help all secondary and middle schools to improve teaching policies, procedures and relationships. The strategy's behaviour and attendance strand is particularly important; it has an audit instrument to help schools to assess their strengths and weaknesses in management of behaviour, high-quality guidance and staff training materials and access to a behaviour and attendance specialist to help schools to address what needs to be acted on following the audit.
	When Ofsted finds evidence of unsatisfactory behaviour, it will visit every school again within a year. For the schools that face special challenges, under the behaviour and improvement programme to which the noble Baroness, Lady Walmsley, referred, there will be £95 million invested this year. As noble Lords said, that is already proving effective; it has improved attendance at twice the national rate and reduced fixed- term exclusion. It is increasingly focused on behaviour as well as attendance.
	The noble Lord, Lord Lucas, referred to the need for more money for pupil referral units. The number of those units has risen from just over 300 in 1997, to more than 450. More significantly, the number of PRU places has nearly doubled in that period. Clearly, there must be a place outside the school, to which pupils can be taken as a result of exclusion, so that they can be dealt with elsewhere and have an intensive focus on how to shift their behaviour until they are ready to come back, when appropriate, into a school setting. So those figures have nearly doubled. We are committed to improving the quality of PRUs and other forms of alternative provision.
	The noble Baroness, Lady Sharp, referred to the importance of internal pupil referral units. She is right—we have invested heavily in helping schools to set up internal learning support units for pupils who present challenging behaviour. There are about 1,500 learning support units already in place.
	The next question that we ought to address is how we know that a policy of high exclusions and turn-around schools would not work. I refer, of course, to what has been stated to be the Conservative solution to these problems. In some way an impression is created that if you kick them all out and have some sort of image of boot camps over there, somewhere, we will be able to sort it. I shall not spend too much time on that matter, because not too much time was spent on it in the debate. But there is a general sort of miasma being created, in the suggestion that if we get the naughty ones out, all will be well.
	I would be interested at some point in understanding how the £200 million proposed to be invested in turn-around schools will be afforded, when the Conservatives have committed to cutting £1 billion from the LEA budgets as part of the James review.

Lord Hanningfield: My Lords, I agree that this is not the right time for a debate on that matter. It is part of a comprehensive package that will emerge during the general election campaign. There may be another time to debate that issue.

Lord Filkin: My Lords, I shall take advice from the noble Lord, Lord Hanningfield, and say no more on that matter.
	Let us not be distracted, but focus on the serious and real issue of how we help schools and school communities to get better at improving the behaviour of all their pupils, in the interests of both the pupils who misbehave and others who suffer the consequences. I shall mention a number of things quickly, before responding to some of the very interesting points made in the debate.
	We are certainly looking at how we encourage schools to work together with their LEAs in collective approaches. In many cases, we believe that it works well when schools themselves have direct control over what might be appropriate interventions to address behaviour. We discussed some of those issues as part of the Education Bill and there was a degree of consensus on them. A good example is the groups of schools in Kent which are doing that. Clearly, we are also increasing training in behaviour management.
	I turn to the interesting agenda presented by the noble Lord, Lord Dearing, about the importance of respect for others and respect for the group. I agree with him strongly, but if we had managed to instil in all pupils a sense that they should respect other people's feelings and wishes, we would not have the problems that we have. It is not a simple matter, as people of 14 do not necessarily have the life experiences or imagination to understand how others feel as a consequence of their behaviour. But the noble Lord is right in his focus on social and citizenship education as part of what a school, a society and parents need to be giving. I like his idea of using the question of how to be a good school citizen as part of the discussion in citizenship education. It roots the question in the local reality. That is a very interesting idea.
	The noble Lord was also right about the issue of primary to secondary transfer, to which the noble Lord, Lord Elton, also referred. The noble Lord, Lord Elton, also went on to develop that as a discussion about how we address some of the deficiencies that have led to pupils at the end of their primary school education being ill equipped because they have in many ways failed to get to a good level of education to take advantage of secondary education. I believe that the noble Baroness, Lady Sharp, was similarly interested in that issue. Noble Lords are absolutely right, of course. At that point, a pupil goes into secondary education when in many ways it is already obvious that there will be trouble. If pupils cannot engage with their learning, they will muck about; you do not need a PhD to understand that.
	I turn to the agenda that we touched on elsewhere, and on which the noble Lord, Lord Lucas, touched slightly in his comments, about how we look to identifying early on, in a primary school or in an early-years setting, those pupils who demonstrate behaviour problems. I do not pretend that that is the totality of the answer, but health visitors and others say that they can identify them, or special educational needs problems. That is absolutely fundamental—and that is what the "change for children" programme is very much about. We need to identify them early and intervene early so that the rot does not set in. We know from the "early support" programme, which we have referred to elsewhere, that if you can intervene early you can address the behavioural problems which will otherwise manifest themselves in primary school and lead to a failure in learning, with those problems being carried into secondary education.
	I am not asserting that all behavioural problems are the product of emotional disturbance very early on. Some of them are, but some of the behavioural problems are young boys mucking about, which brings us back to fairly straightforward issues about creating the climate and discipline in the school and norms where that behaviour is unacceptable. We should consider those issues, too.
	I agree that we need to look at initial teacher training. We are considering how to strengthen the material and behaviour management training in ITT by helping to develop high-quality training materials for teacher training.
	I take seriously the question raised by the noble Lord, Lord Elton, about children missing from education. They may not be causing disturbance in the school, but they will certainly be at risk of causing disturbance in society, let alone their own wasted lives. Following the Ofsted report in December, a letter was sent to all LEAs from Ministers urging them to implement the Ofsted recommendations on children missing from education. We have attempted to make estimates of the numbers. I shall get a letter to the noble Lord saying what our best estimate of those numbers are and summarising the Ofsted report in that regard.
	To go back to what the Secretary of State said in February on this agenda, what I have mentioned is part of the picture and an important mechanism by which we in central government signal to LEAs and schools that the matter has to be treated seriously. We said that all local authority directors must review schools in which behaviour is rated as unsatisfactory by Ofsted and develop action plans to revamp their policies. Ofsted will do follow-up visits within a year and when behaviour is rated as unsatisfactory after a year, Ofsted will certainly consider whether special measures are necessary for that school, using the principles that this House blessed when we discussed the new inspection system.
	We know what happens when schools go into special measures—and perhaps we should have spoken more on this subject in the debate. The issue of leadership by the head teacher and the leadership cadre in the school is fundamental to creating a climate within that school, where behaviour norms are clear and the sanctions for misbehaviour are strong. As part of that, we are looking to a new drive by local authorities to use parenting orders and contracts.
	The noble Lord, Lord Lucas, was right in saying that there are no simple or quick fixes to this issue. But that does not mean to say that it is not the responsibility of government, schools, local authorities and parents to do more and address the matter seriously. We have a strong agenda for doing so and have had a very powerful focus on it, and I believe that we are committed to taking it further, because pupils, parents and communities have a right to that. I thank the noble Baroness, Lady Perry, for the opportunity to debate the issue.

Baroness Perry of Southwark: My Lords, I thank all noble Lords who have taken part in the debate. We have had some inspiring speeches. I shall remember for a long time some of the comments made. I am grateful to all who have spoken.
	We have bounced around some statistics. It is no doubt predictable that the Minister has concentrated on those aspects which are getting better whereas some of us have also concentrated on some which are getting worse. I do not wish to wallow in statistics but the Minister queried one statistic I quoted. I invite him, therefore, to consider his own department's figures. Since 1996–97 there has been a 31 per cent increase in truancy. The figures he quoted were raw numbers: that 40,000 more children are being taught in school. That is more a result of the birth rate than any lack of truants leaving the classroom.
	Like the noble Lord, Lord Mackenzie, I, too, am an optimist by nature. I like to concentrate on the factors which will get better and not those which will get worse. In the light of the concerns expressed in the Ofsted report, it has been right today to consider one area where things are not entirely the half-full cup of the optimist. Those aspects which are going wrong are important and it is right that we consider them. It is for the good of our children in our schools and for society at large that we do our best to get them right rather than simply celebrating the successes.
	However, there is much to celebrate in our schools. I repeat my belief that our teachers are our proudest possession in this country; and I celebrate and trust them completely. I beg leave to withdraw the Motion for Papers.

Motion for Papers, by leave, withdrawn.

Planning Policies

Lord Howard of Rising: rose to call attention to government planning policies on new house building and the control of Traveller sites; and to move for Papers.
	My Lords, when I put down the Motion I had not imagined there would be such interest in the subject. On first glance the Motion may seem to cover two quite different subjects: the creation of distant and unaccountable regional planning bodies and the growth of illegal Travellers' camps. Under closer scrutiny, however, there is a clear common theme between these two issues—that of "the forgotten majority".
	Since 1997 there have been easily discernible trends of certain people, who are not part of the metropolitan elite, do not work in the media, and are not heads of trade unions or quangos, being ignored. They are the millions of ordinary people who work hard, take responsibility, and respect others and their property. It is these people who are angry at the proposed massive development of greenfield sites: the people who are frustrated by illegal Traveller camps flouting planning laws while local councils and the police stand by powerless. In the debate today, I hope to speak on behalf of these people, some of whom I have the privilege of representing as a district councillor and as a parish councillor. I also declare an interest as a landowner.
	There is a tendency by Government to dismiss as "opportunist" and "disgraceful" attempts to raise issues of importance to the electorate. But in truth the Government's attitude to illegal Traveller sites is another manifestation of how remote Government have become from the anxieties and concerns of ordinary people.
	In this country there are strong and detailed planning controls, reaching even to the control of twigs on small trees. Such laws are justified on varying grounds, such as the protection of the environment, the need to prevent indiscriminate building or to enable people to live in harmony with each other. One can debate whether all such laws are needed. In my view there are far too many. But however much one may agree or disagree over the necessary extent of regulation, it is an accepted fact that the rules have to be obeyed. If they are not, then rectification is required and insisted on. We have all read of children's Wendy houses having to be demolished and other similar incidences.
	In the case of new houses, complex and detailed regulation governing everything from fire hazard to the square millimetres of airflow in a room must all be complied with.
	The Deputy Prime Minister has decided that for one section of the population—Travellers—these laws need no longer apply in the same way that they do to other citizens. It cannot be right that one section of the public should be exempted from the law of the land in a way that acts to the detriment of others. For laws to work they must apply equally to everyone and the rule of law must be supreme.
	Planning laws being unfairly applied to different communities creates resentment and undermines confidence in the system. What can be the feelings of someone who has to apply for planning consent to trim a branch of a tree or of a farmer who has to apply for permission to change a field from grass to arable when he sees parts of the countryside being turned into mobile home parks, with whole trees being torn down and concrete being laid with complete disregard for the law? It is no wonder that there are such strong feelings on the subject.
	Up to now, one of the factors assisting Travellers to break the law has been the human rights legislation which has provided cover for an unscrupulous minority of Travellers to do things which society as a whole has assumed and desired to be illegal. Since the Human Rights Act came into force, the number of unauthorised Traveller encampments in England has risen year by year. Local authorities have counted 1,855 Traveller sites where there has been development without planning permission and a further 2,377 where the development is not only unauthorised but the land itself has been seized illegally.
	This is an example of how human rights legislation can deprive the majority of citizens of their traditional freedoms and protections. There is even a Travellers' website which advises its readers to move on to land before making a planning application. By so doing they will be able to take advantage of the Human Rights Act. Let us hope that the verdict of the court yesterday will put an end to, or at least severely limit, that abuse.
	A recent government statement emphasised the importance of adequate provision of appropriate accommodation for Gypsy and Traveller communities and raised the possibility of the use of the Planning and Compulsory Purchase Act 2004 to enforce this.
	Where special provisions are made for certain members of society, there is a strong and corresponding obligation for them to conform to the law and not to inconvenience or irritate other citizens. Rights and privileged treatment carry obligations. The argument made by Government that illegal occupation of property is caused by an inadequate number of sites is open to doubt.
	There are far greater numbers of recent arrivals in this country, such as asylum seekers, than there are Travellers. These new arrivals have found accommodation without breaking the law. Except for financial gain, there is no obvious need for Travellers to contravene planning laws. Planning consent for caravan parks is often given. There is nothing to stop Travellers seeking sites which comply with planning laws, or where planning permission could be obtained before occupation.
	Not all Travellers choose to pursue their distinctive lifestyle in an illegal way. Indeed only a minority do so. The majority of Travellers obey planning laws and live within them. For them, it is essential that the law be applied impartially before the law-abiding majority of Travellers come to be judged in the same way, and share the same odium, as the minority who break the law. It is a minority of Travellers who have decided to go outside the law and treat building law and regulations with contempt.
	By acting in this way, the minority of Travellers bring the whole of their community into disrepute. Worse, a fear and dislike of Travellers is created. Lack of action by the authorities on illegal sites is against the interests of those law abiding members who form the majority of the travelling community.
	The way of life of Travellers is a long and distinguished one. The single largest group, the Romanies, have been known in Britain since the 16th century. It is dreadful that a minority who insist on pursuing their lives in an illegal manner ruin the esteem in which this community should be held.
	Claims have been made that insisting that the rule of law should apply to all, including Travellers, is racist and discriminatory. That is such a superficial accusation that one can only assume that people making such comments have not yet learned joined-up thinking. The great majority of Travellers respect the rule of law and happily practise their chosen way of life within the laws and customs of this country. It is not those who call for the law to be respected and applied equally to all citizens who are damaging the reputation of Travellers, it is the minority of Travellers themselves who act illegally which is creating problems.
	We have seen over the past few days the sensitivity of this subject. It has been complicated greatly by the existence of the Human Rights Act, which sooner or later must be revisited if these and other injustices are to be addressed. At the very least, the Government should allow and give powers to local authorities to act in a way that will protect homeowners from having their peace shattered and the value of their houses destroyed. There are thousands of homeowners living in fear and trepidation of an illegal encampment appearing next to them. At rural parish meetings the biggest complaint in recent times has been the lack of police. Concern about illegal Travellers has taken over, and this should not be ignored.
	I look forward to hearing other contributions to this debate. I beg to move for Papers.

Baroness Miller of Chilthorne Domer: My Lords, I believe that this is the first time in this Chamber that I have debated with the noble Lord, Lord Howard of Rising. Indeed, we shall have a true debate this afternoon, because my views could not be more different from his, in many respects. In my short contribution, I shall seek to remind the noble Lord why we have arrived in the situation that we have in this country. In doing so, I must declare an interest as a Somerset county councillor and point out that when, previously, I was leader of South Somerset District Council and as a parish councillor I had a long involvement with the provision of Traveller sites.
	I was slightly taken aback by the lack of recollection of the noble Lord, Lord Howard, because I shall provide more detail than I had intended. Between 1968 and 1994, there was a continual provision nationally of Traveller sites to solve exactly the types of problems that he outlined in his speech. In my own county of Somerset, for example, we established six fixed sites and one transit site—sometimes, it must be said, in the face of Conservative opposition, but often with good co-operation from Conservative councillors, sometimes in whose patches these sites were to be found. We also developed, in conjunction with the private sector, 50 private sites that varied in size. Altogether there were about 150 pitches.
	However, in 1994, the noble Lord's namesake, Michael Howard, who was then Home Secretary, issued the infamous Circular 1/94, which removed the duty from local councils to provide sites and was one of the most divisive examples of what could have been done with regard to the settled community and the Traveller community. It opened up several issues. First, it raised the question as to why councils were providing such sites at all and, secondly, it started to raise the question—an easy campaigning question for those who chose to campaign on that type of platform—as to why councils should spend any money providing Traveller sites. So it became far more difficult to pursue the, until then, successful provision of sites in conjunction with the community, which involved working with parish councils and district councillors. In that one act of introducing Circular 1/94, Michael Howard undermined many years' work of calm and effective provision—albeit sometimes difficult.
	I am so surprised by the fact that the noble Lord, Lord Howard, has not remembered, or perhaps was not aware in 1994, that that is why we have arrived at the situation we are in now, that I felt it necessary to make those points.
	The noble Lord mentioned that there was nothing to stop Travellers seeking other legal sites. Strictly speaking that is true, if he is looking at the letter of the law. But if, like us, he tried to find a solution now, in the face of the type of divisive attitude that was introduced by the Conservative Party with that one circular, he would find it impossible to work with communities in the same constructive way. Raising the level of the debate, as is the case this afternoon, should encourage the Government—and, I hope any future government—to take a firm grip of the situation and resolve it in a far more constructive way, as I believe that this Government intend to do.
	I should like to suggest a few pointers to a more constructive way forward than simply decrying the current lack of legal sites and then blaming those who are on illegal sites for that situation. We now need a regional approach to the provision of sites, so that it no longer is a question of one district or county doing its very best, only to be frustrated by the next county, which may be under different political control—perhaps Conservative control, given what I have heard from at least the Conservative Back Benches this afternoon—which will provide no sites and will cause the flooding of Travellers over the county boundary into the responsible county's area. A regional approach would therefore be productive.
	Secondly, the Government should bear in mind the lessons that were learned over the years when councils were able to provide sites, as a duty. That is: that small sites work best. As a councillor, some of the time that we spent sorting out difficult issues between sites and the community was when site provision was for 10, or 18, or 20 pitches, or more. Certainly, the sites that worked best were those making provision for eight families or fewer.
	Thirdly, can the Minister comment on the rent services involved? When it comes to private sector provision, a reference rent is fixed at £26 per family, per week. That is far too low to encourage helpful involvement from the private sector. Those are a few of my observations on a constructive way forward.
	I particularly look forward to hearing the contribution of my noble friend Lord Avebury, who has done more than anybody in this House to raise this issue—and to underline the seriousness of the lack of provision, and the imperative need for a duty upon councils to provide sites. Having said that, I also look forward to hearing other contributions—particularly from the Conservative Front Bench, for the noble Baroness, Lady Hanham, is known for her constructive approach to problems. I expect to hear some of her solutions today.

Lord Lucas: My Lords, I am grateful to my noble friend Lord Howard for giving us the chance to have this debate. In a way, I hope that there is not much point in this debate—and that this Government's planning policies will be a thing of the past in a month or so, when we can look forward to a rather more constructive regime. But on the off-chance that they are something that we have to live with for a bit longer, I want to address myself to them in a general sense—at least, to begin with—and to the concept of fairness that has been raised. This is a terribly important concept in planning.
	As in many other areas, we have decided to give up many personal rights in the common good. It hurts us a great deal when we see people getting away with flouting those restrictions that we have imposed upon ourselves. Most of us will have experienced sitting dutifully beside a bus lane, only to see people whizzing up on the inside, knowing that they are not going to be caught. These days, they do get caught—thank goodness for bus lane cameras—and that pain has been removed from us. Yet generally, where we have accepted a set of restrictions, we want them to be enforced and obeyed. That really applies to planning in a big way.
	One difficulty with planning is that so much of it has become centralised. It has very much been a tendency of this Government—when we were dealing with the last planning Bill, and previously—to try to centralise planning decisions, and take them away from the local community, or "regionalise" them, which amounts to the same thing. I would like to see a planning system which paid a great deal more attention to what a particular community wanted.
	One effect of centralisation is that an enormous number of villages around the UK which want development; which want better provision of affordable housing and which want to be allowed to develop themselves in ways which will give additional provision of facilities, find it an extremely hard thing to do. It seems all that they are allowed to do is to sit there and wait for some developer to try and dump a housing estate on them. The initiative is not with local communities to develop themselves. The system is imposed on them from the top: by regional, county and district planning authorities—and by the whims of developers.
	I would like to see a system where what a community wanted to happen was much more important in deciding the pattern of provision. That would help too when one was dealing with obligations. Clearly, there do have to be obligations imposed on communities. If we are to have wind farms, somebody has to have them. If we need more housing, from a national point of view—which I believe we do—then it has to go somewhere. It is the function of central government to make sure that these things happen. Yet, rather than someone sitting in Whitehall saying, "It will be you, Ashford—it's your turn to have 70,000 more people" I would like communities to be allowed to bid for the provision of housing.
	If the planning gain—which otherwise wanders off into other things that local authorities happen to want to do—was to attach itself to those who volunteered for the provision of new housing, we would find a lot of communities saying "Well, yes; another 100 houses would be great. That would secure the future of the school. It would mean that the local shop was viable. The bus service would not require our subsidy any more. It would be good for the local cricket team too". One way and another, there are many benefits that come with development—if you are allowing a community to decide that this is what it wants, that these are the kind of houses it wants to provide, and that this is the location it wants to put them in. If the Government would let things run down to the local community much more, it would find that these big problems in the middle would not be so high. None the less, there does need to be a system which deals with obligations.
	One obligation that I accept, and which we should accept as a nation, is to make proper provision for the travelling community. Human Rights Act or not, I cannot see that that is something we should seek to avoid doing, or do less than well. Therefore I share the regret of the noble Baroness, Lady Miller, at Circular 1/94. That decision was one of the mistakes of the last government; I hope it is not one that we would repeat in a future government. To deal so one-sidedly with a problem is not, it seems to me, a proper response to our obligations as human beings. None the less, there is an obligation which has to be shared out—and we are in a position where many local communities argue extremely strongly against having a part in providing a solution to that obligation. That is probably fundamental and natural. The settled community has always fought with those who want to live a nomadic life; there is always a conflict of interest between the two.
	I disagree with my noble friend Lord Howard in his implication that, in some way, the planning system can deal fairly with a nomadic community. It cannot, for it is run by—and in the interests of—the settled community. There have to be special provisions for the nomadic community. I do not, however, share the implied approbation of the noble Baroness, Lady Miller, for the Government's chosen solution which appears to be that, until a local authority meets the proper provision of sites locally, it is a free-for-all for anyone who wants to establish a site of their own. There really is no reason why individual, local communities should be made to pay in that way for the failure of their local authority.

Baroness Miller of Chilthorne Domer: My Lords, I am sorry to interrupt the excellent speech of the noble Lord, which I was enjoying. I did not mean to suggest approbation for that. What I was trying to say was that at the moment, because of the national difficulty which we have run into in providing legal sites—for the reasons that I outlined—and given the shortfall of thousands of sites, it has become impossible for there not to be illegal camps.

Lord Lucas: My Lords, understanding the reason why it is happening does not mean that I want to see it turned into a policy. I do not believe there are any circumstances in which it is reasonable for a community, with all the restrictions it has accepted on its developments and the way in which they impact on the environment and the locality, suddenly to find a neighbouring field turned into what amounts to a permanent village. In many cases, these are not transit sites; there is permanent occupation. Some of the communities which operate them—I would very much exempt the Roma—frankly, trash the sites and create a great deal of disruption and destruction.
	There is no way in which provision should be made on a free-for-all basis, whatever the local community has or has not provided. Planning rules apply to all of us and must be properly enforced. Just because the local authority has not made provision for, say, sheltered housing for the elderly, does not mean that 1,500 grannies can suddenly put up caravans in a neighbouring field. We have to live with the deficiencies of local government.
	However, that does not mean to say that central government must do so. I would welcome the return of some sharp-toothed obligations on local authorities to make proper provision. The use of compulsory purchase does not seem too strong a measure. If the obligation to make provision is clear to local authorities, by and large they will get on and do it. They would rather make their own choices than have them imposed on them, but their obligations need to be made clear. When, as the noble Baroness, Lady Miller, says, the sites are relatively small—six to eight families—which appears to work best, their impact locally is not harsh. Usually the big sites tend to be disruptive.
	There should be a national obligation on local authorities to make provision and it should be nationally organised and, nationally, properly enforced. There are silly rules such as local authorities having to look first at their own land and exhaust all the planning possibilities before they are allowed to turn to, for instance, the Forestry Commission. Difficulties and restrictions are placed in the existing rules, but if there is a clear obligation on local authorities to make proper provision, I believe that that will happen. However, there is no excuse for waiting for proper enforcement of existing planning legislation for that to happen.
	One cannot allow these mass invasions or the disruption of perfectly law-abiding communities in that way. I very much support those who have expressed a wish for the matter to be dealt with properly. Some say that the Human Rights Act is a wonderful instrument, but they have to show that it can operate fairly for all of us and not just for a few people.

Lord Avebury: My Lords, the noble Lord, Lord Lucas, suggested that there should be a national obligation. He took part in the debate on the Planning and Compulsory Purchase Act 2004, which created precisely such a framework. In the regional spatial strategies, there will be regional targets feeding down into the local authorities as specific numbers of pitches which must be provided over a given period.
	I was surprised that the noble Lord, Lord Howard, in his speech appeared to be totally ignorant of everything we have been doing in the past two years as well as giving a complete caricature of how the present planning system works.
	Two critical pieces of the jigsaw are missing. The first is guidance to local authorities on how to incorporate the needs of Gypsies and Travellers in their housing needs assessment, as required by the Housing Act 2004. That was supposed to appear at the end of last year but has still to be published and the consultation period ended only last week. The second is the promised outcome of the Government's strategic review of policy on Gypsies. It was originally expected in the spring 2004 and then, in the evidence given by Keith Hill to the Select Committee on the ODPM, it was promised for the end of the summer. That, too, has yet to see the light of day.
	We had already lost nine months between the publication of the Niner report in October 2002 and the start of the government review in the summer of 2003. Therefore, there is justification for the criticism in last Saturday's Guardian leader that if Labour had acted firmly and earlier, we would not now have the tabloids inciting racial hatred against Gypsies and Travellers. But, as my noble friend said, the real culprits are the Tories, whose infamous Criminal Justice and Public Order Act 1994 is largely responsible for the present sites crisis.
	Now at least we have the legislative framework in place for a comprehensive solution to the problem of accommodation for Gypsies and Travellers, which is the essential pre requisite for solving all the other problems, such as their education and health deprivation, and their economic and social exclusion.
	The Planning and Compulsory Purchase Act secures the allocation of land by local authorities for Gypsy sites in accordance with numbers derived from the authorities' own housing needs assessments. In December, the ODPM issued a consultation paper on how the process should be conducted. The paper states that where there is an assessment of unmet needs for sites, the local authority should prepare a "development plan document" identifying suitable land for the purpose.
	Money is available through the regional housing boards for housing associations to build new sites. It would be useful if the Minister could say how much money the Government have allocated and what steps they are taking to enlist the RSLs to take part in the process. The Minister will remember that we have always said that this was a weak link in the chain and that although it may be true that most Gypsies would like to provide their own sites in theory, there will be a proportion—at a guess, 25 to 30 per cent—who will need to rely on social provision. As yet, there is no sign of interest from any social landlord other than Novas, whose unique work with the Gypsy and Traveller community is not sufficiently recognised and appreciated. Under the Housing Act, local authorities have to take into consideration the needs of Gypsies and Travellers and incorporate them in their mainstream housing needs assessments. They also have an obligation, which most of them disregard, to consider the needs of Gypsies on unauthorised sites under the provisions of the Homelessness Act 2002.
	And further, they have a duty under the Race Relations (Amendment) Act to promote equality of opportunity for Gypsies and Irish Travellers; to set out policies for achieving this in their race equality scheme; and to promote good relations between Gypsies and other groups. It is most encouraging to note that the Commission for Racial Equality is now in the process of conducting a wide-ranging survey in which they have received written replies from some 150 local authorities and is conducting a detailed examination of nine on just how they are going about complying with those obligations.
	The Tory leader, Michael Howard, claims that if you are a Traveller, you can build anywhere you like, thanks to the Human Rights Act. He says that he will amend or even repeal the Act if necessary, and presumably the same applies pari passu to all the other legislation which gets in the way of shoving Gypsies back on to the roadside, even though none of this legislation was opposed at the time by his party. But this is the Michael Howard who created most of the problems we now face when, as Home Secretary, he repealed the Caravan Sites Act 1968. At the same time, he issued the ineffective and futile circular 1/94, mentioned by my noble friend Lady Miller.
	Up until 1994, councils had to provide sites for Gypsies residing in or resorting to their area and the arithmetic shows that if you project the number of pitches they were providing during the previous eight years leading up to the expiry of that obligation into the future, the councils would have provided an additional 1,500 pitches for permanent sites. The Tories sabotaged that programme without putting anything in its place, and now they are proposing to repeat the same fatal mistake.
	Tory spokesman Eric Pickles, too, falsely claims that,
	"Travellers are now free to disregard planning laws and occupy public land".
	He, his leader Mr Howard and the noble Lord, Lord Howard of Rising, are all wrong, and their statements are dangerous and irresponsible. I add the epithets which the noble Lord, Lord Howard of Rising, ascribed to somebody in the Government: they are opportunistic and disgraceful as well. Maybe they got the idea from the Australian election Rottweiler, Mr Lynton Crosby, of whom the author of a book on the other Howard's 2001 campaign in Australia said:
	"The kind of stuff he seems to be really interested in is the grubby low-level stuff of tapping into a community's prejudices and exploiting them".
	I certainly hope that the Tories are not going to base their campaign on stirring up hatred against minorities, and that they will put Mr Crosby on a shorter leash. Let us have a debate based on the facts, and not on fanning prejudice against a particularly vulnerable minority.
	Brentwood Council, in Essex, is objecting to a direction by the Secretary of State to produce a development plan document for Gypsies by January 2007, even though there is manifestly an unmet need in the area. There are unauthorised encampments in Brentwood, as well as in most of the authorities in Essex and the eastern region as a whole. The number has grown steeply over recent years.
	It may be that the Travellers living in Brentwood had a stronger claim to be accommodated in, say, Braintree, Chelmsford or Basildon—even though, according to the official count of the ODPM, there were more caravans on unauthorised sites in those areas than in Brentwood. The local authorities in Essex should get together and negotiate on how many sites are to be provided in each district or borough. I understand from a seminar that I attended on Monday that this is already happening. The county council in Essex and their equivalents in Kent and Cambridgeshire are now bringing the district authorities together to see of they can agree.
	I realise—and I am sure the noble Baroness, Lady Hanham, will remind us from the debates we had on the Planning and Compulsory Purchase Act 2004—that county councils have no formal role in this matter. They can be important facilitators, however, in ensuring that there is an equitable sharing of the planning duty, so that the numbers are sufficient to eliminate unauthorised encampments in the whole county. As my noble friend Lady Miller of Chilthorne Domer has suggested, that has to be taken up to a regional level if the numbers are going to balance. If we do this, the buck-passing which has gone on over the last 40 years can be ended, and interventions by the Secretary of State under Section 21 of the Planning and Compulsory Purchase Act can be minimised.
	What does the law actually say about unauthorised encampments and the Human Rights Act? There has been a lot of misunderstanding on this matter, some of which we have heard this evening. The House of Lords decided in the case of Qazi that, where a public authority had an unqualified right to possession via the county court on the termination of a right to occupy property, Article 8(2)—right to respect for family life—does not come into play.
	In the Connors case, on the other hand—decided in the European Court of Human Rights; where the council was evicting the family from a pitch they had occupied lawfully for the previous 18 years—the main issue was that the procedural guarantees were inferior to those enjoyed by non-Gypsy occupiers of mobile homes. The Government tried to defend their position by arguing that, although a licensee on a Traveller site could be more easily evicted than someone who lived on a site regulated under the Mobile Homes Act 1983, that distinction was justified by a "pressing social need" and was proportionate to the legitimate aim being pursued. After the case went against them, the Government made amendments in the Housing Act 2004, which made the eviction of Gypsies from council sites similar to the eviction of non-Gypsies from Mobile Homes Act sites, although under different legislation.
	In the Court of Appeal last week, the situation was quite different. The Maloney family were trespassing on land belonging to Leeds City Council. If the right to family life did arise, it could have far-reaching implications, allowing not only Gypsies but anybody else who occupied a public open space to contest their removal on Article 8 grounds. As counsel said in this case, however, all that Connors had demonstrated was that the state of the law which dealt with a local authority's right to recover land forming part of a Gypsy site was incompatible with the European Convention on Human Rights, and that has now been rectified. Most other statutory regimes governing the recovery of possession, if complied with by the court, would probably achieve the balance required by Article 8(2). The Court of Appeal was perfectly entitled to look at the circumstances of the Maloney case from that point of view, rather than relying heavily, as they did, on the decision of the House of Lords in the case of Qazi.
	In dismissing the appeal, however, the court left the existing law dealing with unauthorised encampments and developments exactly as it was, and that is the point. The Human Rights Act does not give carte blanche to any person, whether a Gypsy or not, who plonks a caravan down in the green belt, an AONB or an SSSI. As the European Court said in the Chapman case:
	"The Court will be slow to grant protection to those who, in conscious defiance of the prohibitions of the law, establish a home on an environmentally protected site".
	On the other hand, where the environmental considerations are less material and the local authority fails to satisfy its obligation of meeting the accommodation needs of Gypsies and Travellers, as in the Chichester case, the planning inspector may properly decide that a local authority has failed to justify its interference with the applicant's Article 8 rights.
	These cases, where the human rights of the family are carefully balanced against planning policies determined by Parliament, are apparently all to be swept aside by Mr Howard, so that no unauthorised development can ever be justified on Article 8 grounds, whatever the circumstances. If I am wrong, and the Tories concede that the right to family life may in some circumstances outweigh planning considerations, then I am open to correction. Perhaps the noble Baroness, Lady Hanham, will do so when she comes to wind up. However, the Tories would have to say when they would allow the courts to decide, and when Article 8 is to be disallowed.
	Thinking about the case of a Gypsy family on land belonging to a local authority, the council has the right to recover possession against any trespasser through the county court, or to give directions to the trespassing occupier to leave the land and take any vehicles or property with him. Failure to comply with these directions already attracts criminal penalties, under Mr Howard's own Criminal Justice and Public Order Act 1994, which he seems to have forgotten.
	Further, in the Anti-social Behaviour Act 2003, the police were given the power to remove trespassers on an unauthorised site to some other place, identified by the local authority as suitable within their area. We said at the time that these powers were not likely to be used much, because there would seldom be any official site with a suitable vacancy in the area to which those people could be moved. It would be interesting to know, however, whether the Minister has any figures on the exercise of those powers.
	There are also temporary stop notice powers, which have not been mentioned this evening, allowing councils to halt unauthorised development of sites on penalty of criminal sanctions. Now Mr Howard wants to make trespass by Gypsies an absolute criminal offence, irrespective of whether they have anywhere else to go. This is said to be modelled on the Irish legislation. However, the criminal trespass provisions of their Housing (Miscellaneous Provisions) Act 2002 appear to be similar to those in the 1994 Act in this country. In the year 2002-03 there were 88 traveller evictions in Ireland under this legislation. That does not solve anything, however, because they already have a severe shortage of accommodation, amounting to 1,000 pitches. Evictions would only be a sensible policy, either in Ireland or England, if the people being targeted could move onto a lawful site.
	The mechanisms of the Housing Act and the Planning Act are not an instant fix, but they do provide a medium-term solution, given continued leadership by Ministers and political parties, and collaboration between local authorities, registered social landlords and the Gypsy and Traveller communities. We should not allow them to be subverted by racist media coverage, inflammatory speeches on the hustings, and the unprincipled exploitation of prejudice against the most socially excluded and deprived of all the minorities in our country.
	If we allow that to happen, both Gypsies and the settled population are heading for a disaster. The confrontations that result from unauthorised developments will escalate and the misery and degradation of the 4,000 families without a lawful place to live will be handed down to the next generation and we will have lost the first and best opportunity for 40 years.

Lord Cobbold: My Lords, I intend to speak to the first part of the Motion, relating to the Government's planning policies for new housebuilding. It is stating the obvious to say that one reason for the huge rise in house prices, especially in the south-east of England, has been the shortage of supply. There has been an almost total block on new housing, other than in urban areas and on brownfield sites.
	The metropolitan green belt around London was established in 1955. Before I go any further, I must declare an interest as a landowner in the green belt in Hertfordshire. The fundamental aim of green belt policy, as stated in planning policy guidance PPG2 is to prevent urban sprawl by keeping land permanently open. Few would disagree with that objective. The same is true of the five purposes of including land within green belt listed in paragraph 1.5 of PPG2. They are:
	"To check the unrestricted sprawl of large built up areas . . . To prevent neighbouring towns from merging into one another . . . To assist in safeguarding the countryside from encroachment . . . To preserve the setting and special character of historic towns; and . . . To assist in urban regeneration by encouraging the recycling of derelict and other urban land".
	It is hard to quarrel with any of those objectives and over the years since 1955 they have been successfully achieved, but not without some negative consequences. In addition to the general shortage of supply that has been created, the most significant negative consequence has been the effect on villages and hamlets within the green belt, the natural evolution of which has effectively been frozen in time. That effect is well known and much discussed. The demand for rural housing has made it impossible for the children and grandchildren of families who have lived in the area for generations to live there any more. They are forced to move into town and the villages become commuter dormitories. The new arrivals add extensions to their properties, which is permitted under paragraph 3.6 of PPG2, thus adding to the value of the homes or cottages and further reducing supply of affordable housing.
	Both PPG2 and PPG3, which deals with housing, allow for limited infilling and the provision of some affordable housing to meet local needs but, in practice, especially within the green belt, that very rarely happens. Instead, village schools and shops are forced to close and community village life becomes a fading memory. It is for those reasons that I believe that the green belt restrictions are too extreme.
	Paragraph 1.7 of PPG2 states:
	"the quality of the landscape is not relevant to the inclusion of land within a Green Belt".
	That blanket declaration smothers the fact that landscapes and village settings within green belt areas vary enormously. There are clearly sites where development would be seriously detrimental to the green belt objectives, but there are many others, often small ones, where sympathetic, quality development would have no negative impact and should, indeed, make a political contribution to the natural evolution of the local community, as suggested by the noble Lord, Lord Lucas. Indeed, under a Section 106 agreement, or its equivalent, some of the planning gain could be contractually directed towards other recognised needs or improvements within the community. Any development would of course need to be judged on quality of design and sympathy with local style and building materials.
	To say that the quality of the landscape is not relevant to the inclusion of land within a green belt is simply too extreme. The quality of landscape should be relevant.
	What can be done about that? One possible mechanism is to build into the green belt classification a grading system similar to that which exists for listed historic buildings—grade I, grade II star, and so on—with different rules applicable at each level. If that is too complicated, another idea would be to develop the concept of "white land". Paragraph 2.12 of PPG2 allows for what it calls "safeguarded land" or "white land". Local planning authorities are expected to identify land which,
	"may be required to meet longer-term development needs",
	and should therefore be excluded from the green belt.
	The concept of white land could be broadened to include land within an existing green belt to be reclassified to allow for the reasonable provision, over time, of affordable housing and/or other modest and well designed development in keeping with its surroundings that poses no threat to the basic objectives of the green belt. A register of white land could be established by inviting landowners to submit applications to local planning authorities for the redesignation of specific sites within the green belt as white land. If accepted in principle, such sites would be included in the local development plan and subsequent planning applications affecting them would be considered on their merits.
	That idea is probably fanciful, but the subject merits discussion. I strongly believe in the objectives of the green belt, but also believe that their application has been too extreme. I feel strongly that it is wrong to dictate that the quality of the landscape is not relevant in green belt designation. It is probably too much to hope for to expect the Government, in the run-up to an election, to reconsider PPG2 and to sponsor a review of green belt boundaries on the lines that I have suggested. Nevertheless, I look forward to hearing the Minister's comments on the matter.

Lord Greaves: My Lords, I thank the noble Lord, Lord Howard of Rising, for sponsoring this debate. Like him, I declare an interest as a member of a local authority, in my case, Pendle Borough Council. I regret to say that I did not agree with a great deal of what the noble Lord said in opening the debate, but that is the purpose of debate—that we have different points of view and discuss them.
	I do not want talk about the problems of Traveller and Gypsy sites, except to say in passing how much of a privilege it is to take part in the debate with my noble friend Lord Avebury, who has a distinguished record of nearly 40 years of campaigning and promoting these matters within Parliament and outside. I can remember a long time ago, in 1968, when I was just about still a Young Liberal, campaigning in rural Cheshire on behalf the Caravan Sites Act 1968, which my noble friend piloted through the House of Commons. It will be a living tribute to him for a long time. Even if it has been repealed, the problems and the needs continue.
	I want to talk about the issues implied in the first half of the Motion although, unlike the noble Lord, Lord Cobbold, I do not want mainly to talk about the problems in the south-east and eastern region where, by and large, communities, local authorities and regional assemblies are resisting pressure to build a certain number of houses and trying to reduce the number. The position in the part of the world in which I live is very much the opposite. In many ways, it is really quite bizarre.
	I speak in particular about east Lancashire and its local authorities, especially my local authority area of Pendle, although the position is similar in others, such as Burnley and Hyndburn, although perhaps not quite as acute. I am not expecting detailed answers from the Minister to all the points that I am about to raise in this debate, but I hope that members of the Government and their civil servants will at least take this opportunity to read what I have to say.
	In my borough, we have a moratorium on granting new planning permission for housing of any sort other than one-for-one, where houses are demolished. Apart from that there is to be no planning permission, not just for new greenfield sites but for brownfield sites, for conversions of all kinds whether large or small, for small-scale proposals such as a bungalow in the back garden of a large house, granny flat extensions—whatever it is, there is a moratorium on giving any more planning permission for new housing. That is something which people find quite extraordinary. We do not want lots of new estates built on green fields but we do want to be able to use new housing applications as a sensible part of the regeneration of the old towns.
	Not only is there a moratorium, but on the present policies, without any changes taking place in the mean time to government policies, regional policies, county policies or local policies, this moratorium will last for the next 11 years. So for the next 11 years, on the basis of present policies, there is no more planning permission for new housing in the borough of Pendle. It is not quite so acute in other districts but the same applies. Noble lords may think this is bizarre, they may think that it is nonsense when there is such pressure to build in other parts of the country, and where there is a willingness to build new units in appropriate places in east Lancashire, but it is nevertheless the situation which we have got into.
	Why has this happened? Without going into too much detail, we have planning policies which are too rigid and which are out of date before they are adopted. We have a situation where there are changes in the market conditions, in which more people are prepared to invest in new housing in areas like ours for a number of reasons—partly because they see the attractiveness and the value of these areas and there is a sense of confidence which perhaps was not there a few years ago. It is also partly because of the very great restrictions on planning in neighbouring areas, such as the Ribble Valley, a lot of which is an area of outstanding natural beauty. Going the other way, to the east, over the border into Yorkshire takes you into the Yorkshire Dales National Park where there are very strict planning controls.
	People are therefore looking at other areas—areas like ours which are attractive and which have stunning Pennine countryside, and where there is a new appreciation of the way in which the old mill towns can be modernised and renovated and might play a part in the years ahead.
	The Joint Lancashire County Structure Plan has just been adopted, several years late. The Pendle local plan—an old style local plan, not one of the new ones under the new Planning and Compulsory Purchase Act 2004— has not yet been adopted and is going to inquiry this summer. Both are hopelessly out of date even before they are adopted. The whole planning system is simply not working. The structures and the statutory documents are out of date before they start. Yet, the ODPM—the same department that is responsible for the structure plan, the local plan and the rest—has declared that a large piece of north-east Lancashire is part of the new housing market renewal areas.
	Pendle, Burnley, Blackburn, Hyndburn are all areas where the old terraced housing market is supposed to have collapsed—as it certainly has in some places but not in others—and where a huge government resource is being put in to renovate, restructure and refurbish. Huge resources are being put in to regenerate these old towns—many millions of pounds a year in each of these relatively small districts. As part of that we have to carry out what are called "area development framework studies" which are just another sort of local plan to add to the rest.
	In towns like Colne, Nelson, Brierfield and Burnley these ADF studies are taking place. In my own town of Colne this ADF study took place last year and has come up with exciting proposals which involve the regeneration of an old industrial valley, the Waterside area of Colne, involving perhaps up to 700 new dwelling units. A lot of it is by mixed-use conversion of industrial properties. There is a huge old mill there which is almost certainly going to become empty fairly soon, which, it is proposed, should be the focus of a great regeneration of this old industrial valley.
	All kinds of things are being put forward, such as apartments, craft workshops and perhaps a new cinema. It depends on being able to provide the new housing units, yet we have a moratorium for the next 11 years saying no more housing units and no more planning permission. We have the Government on the one hand with their planning policies. On the other hand they are saying, "Let us have a great refurbishment" and are possibly prepared to put millions of pounds into such a refurbishment. The system is not exactly tied up together. The government department does not seem to have its ducks in a row.
	Now we have The Northern Way, one of the great exciting glossy things that Mr Prescott keeps publishing, telling us what a great thing it is going to be in the north of England. It appears that in east Lancashire we are part of a new city region called the Central Lancashire City Region. We were not asked if we wanted to be in central Lancashire but I suppose it is better than being left out of it. The whole concept of these new city regions is regeneration through growth.
	The whole Northern Way proposal is the Government's staggering attempt—and I mean they are staggering towards making an attempt rather than something which is staggering in its brilliance—to somehow claw their way back to having a regional policy in this country. This is something that governments of both the Tory Party and the Labour Party have been setting their face against for a long time. We do not understand why the Labour Party in particular, with its base of support in places like the north of England, does not adopt a regional policy. But it is perhaps slowly moving towards it. Here we have The Northern Way telling us that we are going to be part of a growth corridor. Yet at the same time, how can we be part of a growth corridor when we cannot give planning permission for any more housing for the next 11 years? It is absolute nonsense.
	Only two years ago the Government cut the allocation of new housing units in the north-west, under the old regional planning guidance, by 15 per cent. The central Government said that the north-west could have 15 per cent fewer houses than people in the north-west wanted to build. Two years later they come back telling us, "It's The Northern Way—it's all going to be wonderful and we're going to be the new area of growth and prosperity". It does not add up.
	What damage is being done? Some of it is just silly. It means that untidy pieces of land, where the obvious way of bringing that piece of land back into use—it might be an area where perhaps workshops were knocked down a few years ago, or it might be old allotments which have fallen into disrepair over the years—and helping to refurbish and regenerate the area is by building a small number of houses on them. But we cannot do it.
	There could be important buildings in the locality whose existing use has become redundant—perhaps old Co-op shops on the street corner, or perhaps small mills or whatever—and the obvious thing to do is to convert them to apartments and housing, but we cannot do it. That is apart from the obvious nonsense of telling people that they cannot have a granny-flat extension where they otherwise could. The approach harms sensible, small-scale local regeneration, which is necessary if those areas are to be part of genuine housing market restructuring. We are then told that we cannot go ahead with a major scheme to regenerate and "transform"—housing market renewal people like to use that word—a whole valley because planning policies decided some years ago in different circumstances still apply.
	The Government must do two things. They must get their ducks in a row. Statutory planning documents that are no longer relevant must be pushed aside and superseded, even if they have not yet been formally adopted, in the interests of what the Government are trying to do in regeneration areas; otherwise, we will not be able to regenerate as they want. The statutory plans say that towns must be closed down and that there should be no growth and development. The Government's housing market renewal strategies say, "Invest to regenerate". The Northern Way talks about growth corridors and proposes regeneration in that way.
	The Government have not got their act together in those areas. Nothing can be done at local level because we are constrained by the statutory planning framework. It is the basis on which inspectors will consider an application for planning permission. If a council tries to give planning permission and override those documents, the Government will refuse it. It is all nonsense. In many ways, the Government's intentions through their new initiatives are good, but the planning process is holding them back. I hope that people will at least read what I have said and understand some of the problems.
	The noble Lord, Lord Lucas, said that he thought that councils should be able to bid for housing allocations. We would love to be able to bid, but we are banned from doing so.

Baroness Scott of Needham Market: My Lords, the two very different halves of this debate have given us an interest range of issues to discuss. I declare an interest as a Suffolk county councillor. That is also a means of putting firmly on the table my credentials as a rural dweller. I am not, as the noble Lord, Lord Howard, suggested of others, part of any metropolitan elite.
	I shall begin with housing policy generally. We certainly agree with the Government that the number of households has been rising much faster than the supply of new housing. But we part company at that point because we do not agree with the Government that simply building more houses in London and the south-east will deal with the problem. Put simply, it is not just that there are too few houses but rather that many are in the wrong place, at the wrong price and in the wrong condition. There is not one housing market in this country and neither should there be one set of planning policies.
	As my noble friend Lord Greaves said, many years of poorly implemented and ill thought-out regional strategies have resulted in huge imbalances in this country. The economy of London and the south-east overheats while we see the near collapse of the housing market in parts of the north-west.
	Over the past 10 years, house prices have risen on average from three and half times to six times an annual salary. That means that houses are becoming increasingly far beyond the reach of many people, particularly the young. I wonder whether the Government have any evidence that building large numbers of houses in London and the south-east will resolve the problem and dampen house prices to anything but a marginal extent. Will it be enough to create access for first-time buyers, who struggle to get on the market?
	Since the late 1950s, the provision of new housing has been pretty steady—150,000 to 200,000 have been built each year. Last year, however, only 21,000 of those units were social housing; that is where the real problem lies in many areas. Since the right to buy was introduced, almost 2 million council and housing association properties have been acquired under that scheme and therefore been lost from the social housing sector. That shortfall has been brought to the Government's attention by all sorts of organisations, including the Rowntree Foundation and the Council for the Protection of Rural England. The noble Lord, Lord Cobbold, outlined the problems in rural communities, where people are simply priced out of their local housing market.
	The thread that brings together the very different comments of the noble Lords, Lord Cobbold and Lord Lucas, and my noble friend Lord Greaves is the inappropriateness of over-centralised planning in this country. Local councils, working individually and in regions, sub-regions or, heaven preserve us, even city regions, are better able to respond to the circumstances of their area.
	The issue of Travellers has occupied most of the debate. It is a difficult and sensitive issue, with a complex mix of social and legal factors at play. The problem of resolving these difficulties is not helped by the sensationalist campaigning style adopted recently by the Conservative leadership. It is not wrong to raise the issue but how it is done, the tone of the debate, is crucial. At risk of causing him some embarrassment, I have to say that if all the Conservative contributions to the debate were carried out in the sort of measured and thoughtful tones expressed by the noble Lord, Lord Lucas, today, we would all be a lot better off.
	As we have heard, Michael Howard's Criminal Justice and Public Order Act 1994, which removed the duty from councils to provide Traveller sites and, as importantly, removed the grant funding for providing the sites, has caused the problem. It is perfectly obvious, and it should have been obvious then, that cash-strapped local authorities will not spend scarce resources on areas of activity that are both discretionary and unpopular. This is one of the few occasions when noble Lords will hear Liberal Democrats saying that more central control is needed, because it helps to resolve this very difficult issue for local authorities.
	As a result of the 1994 Act, we now have an estimated shortfall of 4,500 caravan pitches across the country. Having scoured the recent Conservative proposals to deal with the problem, I have found nothing to address the shortfall. The result of the proposals would simply be that occupants of those caravans would be repeatedly moved on, at potentially great expense to local councils and the police, and to the detriment of the Travellers.
	What makes me very sad is that, until this election bandwagon got rolling, a great deal of cross-party work behind the scenes had been aimed at resolving those difficult issues. The Local Government Association, which is now Conservative led, had been working to develop a set of proposals to assist councils in tackling the problems of unlawful Travellers' sites. It has agreed that the main problem is the lack of unallocated sites. The Conservative chairman of the association said on 8 November that,
	"the travelling community have a right to their lifestyle, and local councils are obliged to provide them with services as they would to members of the settled community".
	Conservatives in another place led the introduction of a cross-party Traveller Reform Bill in July 2002. It contained sensible and measured approaches combining tougher enforcement with the provision of legal sites. But that consensus has now been tossed aside under intense media scrutiny and debate, which has shed much more heat than light. I hope that my noble friend Lord Avebury, among others, has helped to untangle some of those complicated issues.
	We must look at retrospective planning permission. There are cases where Travellers have created sites on land that they have purchased and then applied for planning permission. But let us be clear that, while that practice might be undesirable, it is not an offence. On a smaller scale it happens all the time within the settled population. People make developments and then apply for planning permission afterwards. It is not just about development control. For the eight years in which I chaired the Suffolk county council rights of way committee, the bane of my life was dealing with extensions and outbuildings that had been knowingly built over public rights of way. Of course, it is perfectly possible for the local authority to take enforcement action by demolishing someone's garage extension or barn, but in reality that does not happen.
	I have to say to the noble Lord, Lord Howard, that when I talked to landowners who had built barns over public rights of way, at no point did a landowner say, "Well, I'll take my barn down. The rule of law must reign supreme". If retrospective planning permission cannot be granted the local authority has the power to remove the development. That decision applies regardless of whether the development was a kitchen extension or a Travellers' site.
	The ruling in the court cases in 2002 in Winchester and Wiltshire made it absolutely clear that the Human Rights Act did not confer a general right to a home anywhere. It conferred the right for respect for an existing home. The judgments made it very clear that enforcement action to interfere with that home had to be balanced against the effects of the action. In other words, the eviction of a Traveller from a site, perhaps because of trespass or planning law, could be a breach of human rights legislation if no other provision existed. But it need not be a breach if a suitable alternative exists.
	To suggest that the Human Rights Act needs to be revised or abolished is a misreading of the situation on a monumental scale. To suggest in a civilised country in the 21st century that there should be no legal force behind the right to a home or that there should be no Human Rights Act is shameful.
	A proposed solution lies not within the HRA but within planning legislation. The Local Government Association has suggested that it needs tougher powers to act against development that takes place without planning permission. We would have to be clear that that would apply regardless of whether the developer is a Traveller, a house owner or indeed a farmer. The noble Lord, Lord Howard, consistently talked about illegal activity, but it is very important to understand that it is not illegal to develop something without planning permission, but you have to seek planning permission after it has been done.
	All that leads us back to the issue of allocated sites. The solution lies in the ability of local authorities to use the planning system to allocate suitable sites. Without doubt the system should be part of the mainstream housing planning process, starting with an assessment of need, as we heard from my noble friend Lord Avebury, to planning suitable provision. As my noble friend Lady Miller pointed out, that needs to be done across local authority boundaries, otherwise the problems simply move to the authorities most aware of them, and pressure from electors would cause them to resile from them.
	Sites that are identified in that way could be located in environmentally suitable places of such location and size to ensure that the social and welfare needs of the Travelling community are met and reconciled with the needs of the settled population.
	I do not underestimate the difficulties of managing those allocations in a way that does not cause too much discomfort to the settled community, but it is surely a process that is better done in a managed way rather than the ad hoc confrontational system that is generated at present.
	The sites could be provided and paid for in a number of ways. They do not have to be some sort of handout. Travellers could pay a licence fee or rent for sites that they occupy, and the sites could be owned and managed by the local authorities, housing associations or, indeed by the travellers themselves. They often purchase land on which to live. We need a system in which the land purchased by Travellers is land allocated by the local authorities, and in keeping with general planning policy.
	When Travellers occupy land without permission, existing legislation enables them to be charged with trespass. I was horrified by the proposals of the Leader of the Conservatives that a special law of trespass, which he called the "Travellers' law" should be created. I can think of no other example of creating a criminal offence and then naming a group of people whom we expect to be guilty of it. That might not be racist but it is certainly discriminatory. It should be resisted at all costs.
	Work recently carried out by Cardiff University estimates that some £18 million a year is spent on evicting Travellers from illegal encampments. It argues that the money would be far better spent on establishing lawful sites.
	Travellers currently have infant mortality rates that are three times that of the rest of the population. Their life expectancy is 10 years less than that of the settled population. In allocated settled sites, rather than being constantly moved on, Travellers can better integrate with the local community and have the access to the education, welfare and heath care that they need.
	As we heard from my noble friend Lady Miller, it has not been impossible in the past to find an approach to those issues that better balances the rights of Travellers to lead the life that they have chosen, and the rights of the settled population to see that they have not been disadvantaged by the choices made by others.
	The pre-election activity of scapegoating particular sections of the community is not how to achieve a lasting solution. At worst, stoking up the fires of mistrust makes locally negotiated solutions far more difficult to come by, not just now but for many years in the future.

Baroness Hanham: My Lords, I join others in thanking my noble friend Lord Howard for securing the debate, and for addressing the subject in such a measured and thoughtful way. Everyone has acknowledged that he has done that. Indeed, he and my noble friend Lord Lucas managed to keep the temperature at a pretty low level. It was not raised until the noble Lord, Lord Avebury, got to his feet. I am bound to say that I much resented quite a lot of what he said.
	Before coming to the main purpose of my reply, I shall deal with the campaigning style of which my right honourable friend Michael Howard has been accused. It is right to say that the question of Travellers' illegal occupation arose only when it happened. It was as a result of that and the great concerns expressed by people who lived nearby, or who were affected that the matter has come more into the public eye. That has certainly had a greater effect than anything that Michael Howard has done.
	The debate was not just about Travellers, as fortunately the noble Lords, Lord Greaves and Lord Cobbold, recognised. There should be no illusion about the importance of the subject of Travellers, but the whole issue is about the rights of home owners—those who live in rural areas and who observe the law. They want to live their lives in tranquillity and without fear, but the actions of others may cause serious detriment to their ability to do so.
	Others in that regard include the Government or their agents, such as regional development agencies and housing and planning boards, which we have heard about today. I refer to the Government's Sustainable Communities plan, which has not been touched on, but which I cannot forbear to miss, with its expectation of hundreds of thousands of houses being imposed on swathes of our countryside—but not in Penrith and Cumbria by the sound of things. It threatens that village will be linked to village, and town to town. That has an impact of its own as open fields, beautiful views and ancient historical connections are perceived to be in jeopardy in the future. Home owners who have settled in small hamlets and villages now fear that the field in front of them today may be tomorrow's housing estate.
	Having said that, I bear in mind what the noble Lord, Lord Cobbold, said. I thought that there was something rather neat about his proposals for the white land. He suggested that there are developments in rural communities that will affect rural communities but which do not necessarily need to be part of an overall plan. It should be a local plan for local people, which has not been developed enough in our discussions in this House.
	The people who in the future will be affected by developments may not have much notice taken of their concerns even if there is consultation, but they should know that what is done, is done within the rule of law. I agree with the noble Baroness, Lady Scott, that not everyone follows the law and that breaches of planning control are legendary and legion. Some laws are broken, but can be rectified by retrospective planning applications. But abuse of the planning system has a profound influence and effect on how people live their lives and on their peace of mind. We discussed many of these concerns during the passage of the Planning Act and I believe that we agreed, by and large, that the regulation of land use and development, and its effect on the environment, lies at the heart of good communities.
	Local authorities are now locked in discussions with their residents on local development plans and the acceptable changes to the fabric of their areas, together with rebuilding, conservation and renewal, which will be the blueprint for the future. But outside these local plans are, for much of the country, the development corporations which are the vehicles for the delivery of the Deputy Prime Minister's great schemes, and the threat of regional spatial strategies. Regionalism is something on which we do not all see eye to eye in this House. Our view is that the regional spatial strategies mark another step too far. They are compiled by regional housing and planning boards that are remote from the recipients of their policies. Local people have been left out in the cold, with planning decisions being transferred to distant and unaccountable planning bodies despite the overwhelming rejection of that policy.
	Under the Government's house-building target, an estimated 1.25 million buildings will be constructed on greenfield and brownfield land over the next 20 years. To put it into context, that is the equivalent of 26 towns the size of Slough to be created within 20 years. Yet as far as we can see—and we have had some discussions on this—these developments are being brought forward without any planned infrastructure. Where are the schools, hospitals or GP surgeries? Where are the roads, and what of the development and preservation of water supplies? Will landscapes be threatened, will our historic towns be threatened, and what of the threat of the destruction of wildlife? All these must be dealt with if these developments take place.
	I agree with the point made by the noble Lord, Lord Cobbold, that where we do need houses they should be built for defined populations. They should be built where possible on brownfield sites or whitefield sites if that is possible, and on a scale which is environmentally sustainable. What is required is to ensure that the construction of new homes sustains communities through a process of urban and suburban regeneration rather than through the loss of our precious countryside.
	That leads me, quietly and gently, to the subject of Travellers. As my noble friends Lord Howard and Lord Lucas pointed out so carefully—and I want to repeat—we are not talking about all Travellers or by any means the majority of them. We recognise that Travellers have a right to their lifestyle. If that is the way they wish to live, it is their right to do so. But there is a minority which is causing significant disruption and distress to communities throughout Britain—and this has not been caused or stirred up by any political party; it has been generated by the actions themselves.
	A survey conducted by the National Farmers Union found that illegal Travellers are costing Britain's farmers over £100 million a year. What is more, half of the respondents reported that the number of cases of illegal Travellers had increased over the past five years.
	As we have heard, some Travellers have been buying greenfield land to set up permanent encampments. Buying such fields is not illegal, but they have been setting up encampments in breach of planning law, and then applying retrospectively for planning permission. I acknowledge that the area of retrospective planning applications is one of the most difficult in planning law. As has been said, it is not illegal to do something and then apply for planning permission, but it is extraordinarily difficult to put in place the enforcement that ultimately enables planning laws to be applied correctly.
	There is public concern that some are playing the system. They are using the legal process to sidestep planning rules and leaving local people powerless. In some cases, the threat of such encampments is being used to persuade local people to pay very large sums of money for vulnerable land in order to protect their communities. In other cases the Travellers themselves are buying land and then, as I have said, seeking retrospective planning permission. When it is refused, they appeal, thus ensuring that the encampment can continue in a semi-legal vacuum while the processes run their course. These processes can take many years.

Lord Avebury: My Lords, does the noble Baroness agree that if local authorities conduct their housing needs assessment and then allocate sufficient land for Gypsies and Travellers in the whole of, say, the eastern region to accommodate all those in the area, no one need camp on illegal sites or obtain unauthorised development? Sufficient land would be allocated by local authorities.

Baroness Hanham: My Lords, if the noble Lord will allow me, I shall address the situation on land in a moment. The new collective guidance recently issued by the Government effectively bans evictions on publicly owned land and gives a green light to Travellers to set up illegal camps in parks, on open spaces and in fields owned by councils and other public bodies, thus creating something of a trespassers' charter. The regulations explain how trespassers and evictions should be handled, stating that forced evictions of illegal Traveller camps are banned if the land is publicly owned; that councils and the police cannot infringe any aspect of the Human Rights Act—we have heard quite a lot about that from the noble Lord, Lord Avebury; that welfare checks for Travellers must take priority when dealing with illegal encampments; that the police and councils are to be sensitive to the different cultural perspectives of Travellers, with which I wholly agree; and that evictions cannot take place if Travellers have a reasonable excuse, such as illness.
	The Government also claim that they have given new powers to councils to issue temporary stop notices to tackle breaches of planning controls. We had quite a number of exchanges about the value of temporary stop notices when we debated the Planning Bill. Stop notices cannot be used to remove a caravan if it is occupied by someone as their main residence. Stop notices do not prohibit the use of a building as a dwelling or the dumping of refuse and waste materials, and they apply for a maximum of only 28 days. After that the normal, ineffective planning laws recommence. The local planning authority may not issue a further temporary stop notice on the expiry of the original temporary notice.
	What must happen is that illegal Traveller encampments are stopped from being set up by giving power back to local communities and by ensuring that planning controls are fairly enforced. I liked the thoughts of my noble friend Lord Lucas on this, and I remind the noble Baroness, Lady Miller, that even when there was a requirement for all local authorities to provide land, it was far from the ideal solution. I recall that during the early 1990s, Travellers were parked all over the sides of the roads around Windsor and up towards London airport. The requirement did not prevent illegal encampments. Indeed, it was absurd because the requirement extended even to areas such as central London.
	We all recognise that there are Travellers who will want to move around and that sites must be provided. There is nothing in any law or anyone's policies to say that those sites cannot, by agreement, be provided. That brings us to the point that my noble friend Lord Lucas raised: this can be carried out at a local level with local agreement. That is the way to do it, because that is how to prevent resentment when these things happen.
	This has been by and large a good-tempered debate. I am glad about that because this subject does not require people to raise the temperature. It requires a considered view of what is happening and what needs to be done. The link between housing and the housing needs of not only the whole community but also Travellers is extremely important. One cannot overcome the other by trying to go around the law in the way that we believe is happening at the moment. I again thank my noble friend Lord Howard for his considerable contribution to the debate.

Lord Bassam of Brighton: My Lords, I too want to join in the traditional congratulations to the noble Lord, Lord Howard of Rising, on orchestrating the debate. I would usually like to go further than congratulating speakers, but I found his contribution somewhat puzzling. The debate has two parts: to call attention to government planning policies on new house building; and to look at the control of Traveller sites.
	The noble Lord spent about 10 seconds on the housing issue and 12 minutes on issues relating to Travellers. He is entitled to do so; it is his debate. His contribution was in the mindset of much of the coverage undertaken by some of the tabloid press—a good deal of it inspired by the leader of the Conservative Party, Mr Howard.

Baroness Hanham: My Lords, we have all tried extremely hard not to make personal judgments and statements about people. I could have been quite tough on the Government had I wanted to. I have chosen not to and so have my noble friends behind me. We would disagree strongly about whether the chicken came before the egg was laid or after the egg was hatched. Perhaps the noble Lord would bear that in mind when discussing my right honourable friend in the other place, Mr Howard.

Lord Bassam of Brighton: My Lords, the noble Baroness is right to remind us that debates in your Lordships' House are temperate and good-natured: and so they should be. They should be so on this issue too. I was going to pay tribute to all Members of your Lordships' House—including the noble Lord, Lord Howard, who made at least one or two points with which I had little difficulty in agreeing—who have contributed to the debate because by and large it has been good-tempered.
	I should hope that we would have a more measured approach, and one outside a potential general election campaign, to the issue of Travellers and the control of Travellers' sites because the subject is important enough to merit and deserve that. Because the noble Lord, Lord Avebury, is in his place, I am reminded that we have had such debates in the past when looking at housing and planning issues. We have made considerable constructive progress.
	The noble Baroness, Lady Scott, paid tribute to the LGA Conservative leadership and other Conservative Party members for their contribution. My wish is that that positive approach was more broadly spread. I will endeavour in the time allotted to me to answer as many questions as I can, but I want to set out some important policy elements from the Government on the two issues.
	As many noble Lords have observed, housing is now much higher up the national political agenda than for many years. It falls to all of us to work well together to ensure that everyone in society has a decent home. We must improve the choice and quality of available housing. We should work together to address the country's housing needs in a way that protects greenfield sites and promotes sustainable development and sustainable communities.
	When people walk out of their houses they also want to feel part of the wider community: a community that is cleaner, safer and greener; a community in which they can identify with those around them; and that gives them a sense of place, purpose and pride. The debate we need to have is how to help to provide the homes people need within sustainable communities, whether they are Traveller communities or settled communities.
	The Government are keen to make home ownership more widely available and to ensure that sufficient affordable housing is also available. We want to ensure that the planning system delivers the right housing in the right place and at the right time—an important issue on which the noble Lord, Lord Greaves, touched. The Government are considering how we will respond in that context to the important recommendations of Kate Barker on the need to increase housing supply. In the mean time it is necessary to ensure that all current commitments to housing supply are honoured.
	To achieve sustainable communities we launched the sustainable communities plan in February 2003. More recently the Office of the Deputy Prime Minister has published two new five-year plans. Sustainable Communities—Homes for All sets out the Government's programme to promote opportunity, choice, quality and fairness in housing across the country. Sustainable Communities—People, Places and Prosperity sets out plans to revitalise communities and strengthen the voice of neighbourhoods and local people in how services are delivered.
	The government guidance is clear about how authorities should plan for new homes. The guidance on planning for housing—PPG3—establishes that the first aim is for authorities to focus new development, wherever possible, on brownfield sites. The noble Lord, Lord Howard, in his one reference to building, tried to tell your Lordships' House that the Government were attempting to concrete over greenfield land. That is simply not the case.
	The Government are committed to protecting greenfield land by maintaining our target of at least 60 per cent of new housing development on brownfield sites. Development on brownfield land has risen from 56 per cent in 1997 to 67 per cent in 2003. In London some 90 per cent of all new development is on brownfield sites.
	The noble Lord, Lord Cobbold, raised some interesting questions around the issue of greenfield, brownfield and—as he constructed it—whitefield development. I want to make it clear that PPG3 says that sustainable greenfield development—the issue on which the noble Lord interestingly touched—is allowable and may be needed to meet agreed housing numbers particularly where brownfield opportunities are inappropriately located.
	PPG3 is clear that authorities should be developing policies in their plans to ensure that the most effective use is made of existing brownfield sites. Where it is appropriate there will of course have to be some greenfield development. The point made by the noble Lord, Lord Cobbold, about the nature of housing developments in rural communities was extremely important in that context.
	However, opportunities for new development should not be wasted with low-density schemes, as can happen. Not only will those not work towards building sustainable communities, but they will also exacerbate the need to release greenfield sites, something that none of us wants to see to excess. We are also doing well here: housing densities in England have risen from 25 to 33 dwellings per hectare since 1997 and in London average densities are around 53 dwellings per hectare.
	Good design can help to ensure that higher densities even improve and enhance an area and its environment. The Government have collected many good practice examples that show what can be done without compromising or damaging the character of an area. The noble Lord, Lord Lucas, raised an interesting argument against regional spatial strategies and district plans. In making those points he missed the importance of having a regional structure within which local district plans can be made. He was focusing on strengthening the arm of the community: of course that is important, but it has to be seen in a wider context and against the background of wider need—something that the noble Lord has recognised in the past.
	For that reason we say that local authorities should work with their communities to develop a vision for their communities. They should explain the choices that they have in delivering the housing needs in their community. The new planning Act enhances the ability of local authorities to work with local communities to plan positively to ensure that the housing needs of the community and the other aspirations and needs they have for infrastructure improvement are met.
	It seems to me that the same people who often want to stop any greenfield development also do not want housing built at higher densities. But they cannot have it both ways unless they want us to stop all house building. This appears to be a politically motivated justification of nimbyism for the rural and sometimes suburban voter.
	I know that the noble Baroness, Lady Hanham, has particular fears about green belt policy, but I reject the assertion that we threaten green belts. The Government remain fully supportive of the green belt. Indeed, the policy remains unchanged from that of the previous Conservative administration pre-1997. There are no proposals to relax it. There remains a general presumption against inappropriate development in the green belt, and that presumption is as strong as ever.
	Indeed, our target is for each English region to maintain or increase the current area designated as green belt in local plans, including regions containing growth areas. In fact, between 1997 and 2003 the size of the green belt nationally increased by more than 19,000 hectares, with a further 12,000 hectares proposed in emerging plans.
	We now propose to strengthen the protection of the green belt. We will shortly be consulting on a new green belt direction which will ensure that certain proposals for development in the green belt will be referred to the Secretary of State. It will be the strongest ever green belt policy put forward by a government.
	I turn now to the other side of the discussions we have had during the debate—that is, the issue of Gypsies and Travellers. I am sure that most Members of your Lordships' House will agree that Gypsies and Travellers should enjoy the same rights as everyone else to establish a decent place to live as long as they do so within the law. We believe in an inclusive society where members of this community have the right to pursue a traditional nomadic lifestyle.
	The noble Lord, Lord Howard, paid tribute to those law-abiding members of the travelling community and referred to the law breakers as a minority. We should hang on to those two very important comments. We want to make sure that Gypsies and Travellers have the same rights as others—not rights over and above others—particularly in regard to essential services, where they should have rights of access without fear or discrimination.
	There is growing evidence to suggest that Gypsies and Travellers are among the most vulnerable and marginalised ethnic and minority groups in the United Kingdom—a point picked up by the noble Baroness, Lady Scott. This is one of the reasons why the Office of the Deputy Prime Minister is currently undertaking a Gypsy and Traveller policy review, and officials will be reporting to Ministers shortly.
	The review focuses on equality issues for the Gypsy and Traveller community and the mainstreaming of Gypsy and Traveller issues within wider local and national policy. It is looking at how to encourage more publicly provided and privately owned sites and how to overcome some of the unnecessary barriers that exist to site provision. We want the planning system to reflect the mainstreaming of Gypsy and Traveller accommodation within the wider social housing context and support changes that will lead to the improvement of the health of Gypsies and Travellers, who have the poorest health status of any black or minority ethnic group in England.
	As part of this wider policy review, we have also recently consulted on a new planning circular providing guidance on Gypsy and Traveller sites. While the Government recognise that some Gypsies and Travellers wish to embrace a nomadic lifestyle, we know that others prefer to live a more settled existence on local authority or private sites.
	It would be helpful to draw a distinction between unauthorised development and unauthorised encampment, an issue which was referred to on many occasions during the debate. An unauthorised encampment is one where the land is not owned by those setting up the encampment, and I will talk about that later. An unauthorised development is where a person or persons—be they Gypsies and Travellers or members of the settled community—purchase land and carry out development for which planning permission is required but where no such permission has been granted. This is considered a breach of planning control and amounts to unauthorised development. Local planning authorities have a huge range of enforcement powers to deal with unauthorised developments.
	I am sure that the noble Lord, Lord Howard, will understand that I am unable to comment on specific planning cases. However, it would be useful to say some words about the Government's policy on Gypsy and Traveller sites and planning.
	Planning policies concerning the provision of suitable locations for Gypsy and Traveller sites, whether local authority provided or private, are currently set out in the Department of the Environment Circular 1/94—a circular which has had certain notoriety in the debate. The Government believe that the 1994 circular is not working effectively in many cases and in many areas to identify enough appropriate sites. Recent caravan counts have shown that there are around 3,500 caravans on unauthorised developments and encampments in England, with around one-third of these in the eastern region. There is a clear mismatch between need and planned permission.
	The new draft circular stresses the importance of local authorities undertaking a proper quantitative assessment of need and, through the new regional planning process, for that need to be met via proper spatial planning by identifying specific sites in local plans or setting achievable criteria that offer some certainty that planning permission will be granted.
	Unfortunately, as we know, Gypsies and Travellers often proceed to establish sites without first obtaining the necessary planning consent. In many cases the locations they choose are completely inappropriate in terms of land use. Enforcement action by local authorities against such unauthorised development is therefore common.
	The noble Lord, Lord Avebury, asked for figures on such unauthorised developments and enforcement. We do not collect those centrally.
	We need to recognise that the effect of circular 1/94 was that local authorities did not allocate land in plans and adopted criteria which were often unrealistic, making it very difficult for Gypsies and Travellers to identify appropriate sites.
	The Government expect the same standard of behaviour of Gypsies and Travellers as of the settled community, and we take the view that any anti-social behaviour should be dealt with in the same way. As to enforcement, anti-social behaviour orders can be used against Gypsies and Travellers with no fixed address. The forms for application, summons and so on can use the address where they are residing at the time or simply "no fixed address".
	Travellers and Gypsies, whatever type of site or encampment they are on, should take responsibility for their plots or the land next to them and keep them clean and not tip waste. They should dispose of waste properly and not cause nuisance to neighbours. Most do exactly that.
	Local authorities have a key role to play in identifying suitable locations for sites and working with Gypsies and Travellers to assist them to find land that they can purchase and develop. A few planning authorities have now adopted that best practice.
	As a leader of a local authority for some 13 years, I found this one of the most difficult and vexed issues to deal with. Quite frankly, while my authority adopted best practice, made some provision and managed to work in close partnership with one or two other local authorities that did the same, the majority of local authorities did not want to work closely together. Many were happy to play the game of pushing Gypsies and Travellers from pillar to post and to wash their hands of any need or responsibility to tackle and deal with some of the difficult issues which arose as a result of the travelling communities.
	It is for that reason that I believe that close co-operation between local authorities and Gypsies and Travellers is very much the best way forward. It can help to reduce instances where Gypsies and Travellers establish sites unlawfully, causing friction between Gypsies and Travellers and settled communities.
	In that context, it will be helpful perhaps to say something about the enforcement of planning control in general. The Government share the view that local planning authorities should take enforcement action if they consider that an unacceptable breach of planning control has occurred. I mentioned earlier that they have a range of tools at their disposal and I should like to outline exactly what these are.
	Under powers in the Town and Country Planning Act 1990, as amended by the Planning and Compensation Act 1991, local planning authorities have wide-ranging enforcement powers to deal with breaches of planning control.
	First, they have the power to serve a planning contravention notice. This can be used where it appears that there may have been a breach of planning control and the local planning authority requires information about the activities on the land or to find out more about the nature of the recipient's interest in the land.
	Secondly, they have the power to issue an enforcement notice, requiring steps to be taken to remedy the breach within a given period. There is a right of appeal to the Secretary of State against enforcement notices. If the notice is upheld, failure to comply is an offence with a maximum penalty on conviction of £20,000.
	Thirdly, they have the power to serve a stop notice. This has the effect of immediately stopping any activity which contravenes planning control guidelines and where there are special reasons which justify doing this. If contravened, the resulting offence can be prosecuted in the magistrates' court with a maximum penalty on conviction of £20,000.
	Fourthly, they have the power to serve a breach of condition notice where there is a failure to comply with any condition or limitation imposed on a grant of planning permission. Fifthly, they have the ability to seek an injunction in the High Court or county court to restrain any actual or expected breach of planning control.
	Finally, there are improved powers of entry on to land for authorised officers of the local planning authority for them to obtain information required for enforcement purposes.
	In addition, in the Planning and Compulsory Purchase Act 2004 we introduced the temporary stop notice. That enables local planning authorities to take prompt action to stop unauthorised development immediately. It can be in force for up to 28 days. This will allow local planning authorities time to serve an enforcement notice to remedy the breach of planning control. Such notices can be used to prevent any new caravans coming to the site, even if those new caravans are the main dwellings of a Traveller or Gypsy. Where caravans are already on the site, temporary stop notices can require them to leave if their caravans are causing serious harm to the public interest—for example, if they are on a site of special scientific interest or on polluted land.
	Injunctive powers in the Town and Country Planning Act 1990 enable a local planning authority to enter and remove unauthorised development undertaken in breach of an enforcement notice.
	There are many measures open to planning authorities and many powers which the police can use in dealing with unauthorised encampments and unauthorised developments. I reject fundamentally the allegation that we have weakened the enforcement processes. In support of our case, the Association of Chief Police Officers and local authorities say that they are content with the powers necessary to deal with unauthorised encampment. So the Government have not been weak in ensuring that there is a proper regulatory and enforcement regime—far from it. We have taken steps to improve and strengthen it.
	The important thing to remember is the need for close working relationships and co-operation, particularly with regard to Gypsies and Travellers. In that direction lie solutions to some of the problems to which noble Lords have drawn attention during this debate. The sensible adoption of spatial plans and the recognition in local development plans of the importance of site provision and facilities are ways in which we can improve the conditions for Gypsies and Travellers and reduce the tensions which exist in some communities on the urban fringe and in rural areas.
	No one is saying that there is not a problem. We have understood the nature of the problem and want to see a practical and sensible recognition of it, with practical and sensible steps taken, rather than a hysterical debate. It is not enough to consign Gypsies and Travellers to a state of limbo. It is all very well for Michael Howard to have a seven-point plan, but he needs an eighth point. All seven points are about enforcement and raising the debate about the Human Rights Act. There is no eighth point to his plan. What is the solution to dealing with the issues and problems that his own action in government led to and created in the past? We want a practical and sensible resolution to some of those difficulties. By co-operation, working together and understanding the nature of the difficulty, I think we can do that. I hope that that co-operation will lead to the ending of some of the difficulties which some noble Lords have raised in today's important debate.

Lord Howard of Rising: My Lords, I thank those of your Lordships who have contributed to this debate and have made it of such a high standard. It would appear that some of your Lordships believe that I was arguing against the travelling community. I was not. I was speaking in defence of the rule of law.
	Persuasive and erudite though your Lordships' arguments have been, they have not convinced me that one section of the community should be exempt from the law, most especially when such distress is caused to others. If you permit exemption from the law and you follow that line of argument, you end up with a breakdown of law and order, as different groups decide on different actions which will suit them, irrespective of whether they harm or inconvenience others. I believe that strong and prompt action should be taken against illegal Traveller sites.
	Comment was made on the lack of accommodation for Travellers. I would not dispute the suggestions by the noble Baroness, Lady Scott of Needham Market, to increase Traveller accommodation, although I think that most of what she suggested is already possible. I do not think that anyone could argue strongly against providing more accommodation, provided that it was done within the law.
	I thank the Minister for his kind remarks. He mentioned the tabloids. I confess that I am avid reader of the Sun, as I always get advance notice of every government decision. I beg leave to withdraw the Motion for Papers.

Motion for Papers, by leave, withdrawn.

Income Tax (Trading and Other Income) Bill

Lord McIntosh of Haringey: My Lords, I beg to move that this Bill be now read a second time.
	I am pleased to open the debate on this Bill, which rewrites our current legislation on the taxation of trading, property and savings and investment income. The aim is to make that legislation clearer and easier to understand.
	I should explain to the House that the Bill has been certified as a Money Bill. It was introduced into Parliament in another place at the end of November. Under the special procedures applying to these tax law rewrite Bills, the substantive debate on Second Reading was held in Committee. The Bill then passed to a Joint Committee of the two Houses where it was considered on 1 February. The Joint Committee includes among its members the noble and learned Lord, Lord Howe of Aberavon, the noble Lord, Lord Blackwell, my noble friend Lady Cohen and the noble Lord, Lord Goodhart. I am grateful to them for their efforts in scrutinising the Bill.
	The Bill then passed back to the House of Commons to be debated on Third Reading, and has now come to this House for its remaining stages which the rules say can be taken in one day. The Bill has also been considered by the Delegated Powers and Regulatory Reform Committee, which has approved it from its standpoint.
	This is the second rewrite Bill to venture into the realms of income tax, and it does so in a significant way, by tackling Schedules A, D and F. About 20 million people receive income of one variety or another which is taxable under these schedules.
	Before I say any more about the specifics of the Bill, it is perhaps worth putting it in context by explaining a little about the work of the Tax Law Rewrite Project. It was set up in 1996 under Mr Kenneth Clarke, then Chancellor of the Exchequer. It is a project to rewrite the UK direct tax code, the provisions of which have been enacted over the past 200 years. The principal aim of the project is that the rewritten legislation should be accepted by all the main users as clearer and easier to use.
	While making the legislation more accessible, the project takes great care to preserve the effect of the present legislation, apart from minor agreed changes. The role of the Joint Committee was to approve such changes as are in the Bill and agree that they are indeed minor.
	It is beyond the remit of the project to make any changes in the main tax policies. It can encompass minor changes where these will improve the legislation. Examples of such changes are the inclusion of extra-statutory concessions; the repeal of obsolete material; and the correction of small anomalies. The Joint Committee focused in particular on those minor changes. It satisfied itself that all of them are within the remit of the project. It heard that the project dropped any proposed changes that did not meet the approval of its two external committees.
	The Joint Committee noted the widespread public scrutiny of the Bill as a whole and the minor changes in particular, which are flagged up very clearly in the consultation process.
	In the run-up to the Bill, 18 papers and a draft Bill were published for formal public consultation. A response document summarising the comments made on the draft Bill and setting out how the project has taken account of them was issued in September.
	The consultative process does not stop with formal papers. The project continues to look at other ways of involving users of tax legislation and keeping them informed. Over the past two years the project has made more use of its website to publish work in progress, in the form of early drafts or changes to previously published work.
	I turn to the content and approach of the legislation. The charge to income tax is currently broken down into a number of schedules. Over the years, schedules have come and gone. I am old enough to remember the schedule that taxed imputed income on owner occupation, but that has been gone for some 40 years now. The Bill tackles income tax charged under those schedules. It brings the charging and calculation rules for the different sorts of income together in updated classifications, such as trading income, savings and investment income and property income. Under the current legislation, it integrates foreign income in the same parts as equivalent United Kingdom income, confining any special rules that apply to foreign income to a different part.
	The Bill applies for income tax only. The project consulted at an early stage on whether to aim for a greater separation of the income tax code from corporation tax. Users of the legislation are in favour of making this split; so where the legislation written in this Bill applies at present to both codes, the current provisions will be repealed for income tax purposes, but will continue to apply for corporation tax. The Joint Committee heard that the Bill is the first step in the separation of the income and corporation tax codes. The project will consult further on how this aspect of the work should be taken forward.
	Various techniques have been used in the Bill to make legislation clearer and more accessible. First, and most important, is the imposition of a coherent structure. Instead of the haphazard order of provisions in the existing legislation, the Bill presents all the material in a logical way, with linked topics grouped together. The Bill contains plenty of navigational aids for the reader, such as an introductory scene-setting chapter and signposts to other relevant provisions. These are designed to help readers to find their way through this large body of legislation.
	Other features of the rewrite process include shorter sentences, modern language, more consistent definitions and greater use of reading aids, such as formulae, tables and method statements. All this combines to make a new style of tax law that is more accessible, easier on the eye and altogether more user-friendly.
	The project continues to enjoy the strong support of the users of the legislation. The comments made by the representative bodies confirm that this latest Bill from the project has been well received. The Institute of Chartered Accountants in England and Wales, for example, said that the Bill, as published in draft last spring,
	"is well-constructed and we commend its drafting. It covers important ground and, as it facilitates taxpayers' easier understanding of legislation which will affect very many of them, it is a useful addition to the rewrite legislation".
	The Chartered Institute of Taxation said:
	"We recognise and commend the huge amount of detailed work that has gone into the production of this Bill . . . Please extend our congratulations to the entire project for what is on balance a mammoth and an excellent product".
	To sum up, this is an immensely worthwhile project which modernises our current direct tax legislation, making it clearer and easier to use. It would be wrong of me to conclude without paying tribute to everyone who has taken part in this work from the time of its initiation by Mr Kenneth Clarke in 1996, including the supervisory role played by the noble and learned Lord, Lord Howe of Aberavon, whom I am delighted to see in his place—I welcome him into a place in the gap in this debate. It can be fairly said that this is a matter where there is no party political controversy of any kind.
	This income tax Bill is another major milestone in the work of the project. Of course there is work still to be done to complete the rewrite of income tax, but this Bill is a demonstration of further significant progress. It maintains the project's excellent work and its track record of improving the existing legislation. I commend the Bill to the House.
	Moved, That the Bill be now read a second time.—(Lord McIntosh of Haringey.)

Baroness Noakes: My Lords, I thank the Minister for introducing the Bill. He will note that we are an even more select band of Treasury Peers than normal. It is tempting to suggest that we decamp to the Bishops' Bar rather than continue with the debate, but perhaps we should do our duty.
	As noble Lords will be aware, your Lordships' House likes nothing better than an opportunity to scrutinise complex legislation, but with this Bill we are entitled to heave a great sigh of relief that we will not be expected to apply our skills to it.
	With the exception of some minor instances which have been identified, the Bill does not change the existing law, as the Minister has said, and we have no problem with the changes that have been made. The Bill contains an extensive power for the Treasury to rewrite legislation, but in another place the Government gave a clear commitment that that power would be used only with the agreement of the Tax Law Rewrite Project Steering Committee, and we are entirely content with that.
	There has been ample consultation, and the Minister has read out some of the responses. If we allow for the rather stuffy language that such bodies use, we might take the response as ecstatic. We must applaud that.
	The Minister has also rightly paid tribute to those who have been involved in this project to date, in particular my right honourable friend Kenneth Clarke and my noble and learned friend Lord Howe of Aberavon. I am proud of the enormous contribution that those former Chancellors from my party have made to the project. However, I join the Minister in paying tribute to all those who have worked hard on this project to date.
	The Bill runs to three volumes, and it even has three volumes of Explanatory Notes. We need more than 700 pages of densely packed text just to set out our charging system for trading and other income. When the whole of income and corporation tax was consolidated in 1988, it needed fewer clauses than this Bill, although I concede it did have a few more schedules.
	It should also be noted that the Bill does not include some important aspects—notably, the anti-avoidance provisions of Part 17 of the Income and Corporation Taxes Act 1970. Those have to be added to get a sense of how much law is still required for trading and other income.
	The Bill may well have achieved its purpose of rewriting in a comprehensible form the income tax law for trading, and so on. The result, however, is daunting, and we have a legal patchwork, with some legislation still in the old style. The precedent of the Income Tax (Earnings and Pensions) Act 2003 is not encouraging, because large parts of that were superseded almost immediately by the Finance Act 2003, which was written in an incompatible style. That raises the question of how the Government will ensure that parliamentary counsel embraces the new way of doing things. How can the rewrite philosophy get itself embedded into ongoing tax legislation? I would be interested to hear the Minister's views on that.
	We believe that the Tax Law Rewrite Project is a worthy one. It has taken longer than originally envisaged, although in no sense do I lay the blame for this on the Inland Revenue or on the Steering Committee. This Bill, along with its predecessor in 2003, demonstrates the enormity of the task.
	It was never the intention of the rewrite project to achieve simplification of the tax system, but what it has demonstrated is that simplification has to rise up the agenda. A quick glance at the Bill will reveal that the taxation of trading income is by no means simple. Over the years there has been a tweaking of the rules here and there for particular purposes, and the end result lacks real logic. The taxation of property income included in this Bill is particularly complex, with myriad rules covering leases, surrenders, holiday lets, wayleaves, special rules for eco-friendly deductions and many other things. The rewrite project has rewritten the law in a more comprehensible form, but the underlying substance remains very complex.
	My noble and learned friend Lord Howe gave the Hardman lecture on simplification of tax a few years ago. I had not expected him to be with us this evening, because he did not have his name down on the list, so I have stolen a bit of his speech from 2000, which I am going to continue to keep. He started his speech with the arresting thought that if taxes had existed in the Garden of Eden, the serpent would not have needed an apple; the prize of a simpler tax system alone would have seduced Eve.
	My noble and learned friend's proposition was for a two-pronged approach to operate alongside the rewrite process. In the fullness of time, simplification and rewrite would converge, but they would have to be run separately initially. The two prongs were a reduction in the volume of new tax legislation, plus a project similar to the rewrite project to tackle simplification on a systematic and detailed basis. If we were to look seriously at simplification, we would have to look very closely at the use of fiscal incentives, which are usually accompanied by a very large quantity of anti-avoidance legislation and hence become a great source of complexity. Many would of course argue that fiscal incentives are not themselves conducive to economic efficiency. Weaning Chancellors off the drug of fiscal incentives may be something of a challenge, I concede.
	Simplification would also require us to look again at the role of accounts as the tax base. They are currently the starting point, but then the complexity is layered on top. We may have to look again at purposive legislation, something that successive Chancellors have shied away from as a tool for dealing with avoidance. None of that is easy.
	I believe that we are still waiting for a sight of the Finance Bill, which last week's Budget spawned. One hopes that it will be shorter than last year's mammoth 634-page Act, but we fully expect a large number of complex clauses, including pages of new anti-avoidance legislation. We fully expect the process of complexity to continue. Do not the Government think that it is now time to pause?
	I do not believe that many ordinary taxpayers have any idea of the rules that apply to them. The Tolley's tax handbooks, one of the best known manuals, used to be compact and briefcase-friendly. The latest set runs to 11,000 pages. That means that in practice armies of accountants and lawyers have to exist to guide taxpayers through the system. As a former accountant in public practice, it will doubtless seem disloyal if I say that I do not regard that as economically useful activity. So does the Minister agree that we now need a fresh approach with simplification as the goal?
	None of that is to take away from our support for the rewrite project overall and this Bill in particular. I repeat our thanks to all those who have laboured to date and add our prospective thanks to those who will continue to labour to complete the task.

Lord Newby: My Lords, I join the noble Baroness in welcoming the Bill and other products of the tax rewrite project. The work that is required to produce a Bill of such volume and comprehensiveness is obviously considerable, and a tremendous debt is owed to the draftsmen and women who have worked on it. From talking to tax practitioners, I know that the effect of having the legislation written in the form of the rewrite project rather than the previous form is of great benefit to them.
	None the less, I agree with the comments of the noble Baroness, Lady Noakes, that this is only half of what is required if we are to get a manageable tax system, which we would all agree barely exists at the moment. The other half is the question of simplifying the system, and not just making it more comprehensible.
	There are two issues that must be resolved. First, in simplifying the system, some things that currently exist must cease to exist. I strongly agree with the noble Baroness when she talks of the need to have a cull of fiscal incentives. It is our view that many of the annual incentives that are introduced—and which have been introduced by the present Chancellor—to micro-manage specific parts of the economy and specific sectors are at best ineffective and often counter-productive. One can cite the abolition in this Budget of the stamp duty-disadvantaged areas relief, which measure has ended up not only costing the Exchequer many multiples of what was envisaged but, almost certainly, has been counter-productive, given that the areas that were allegedly disadvantaged included many if not most of the most attractive areas in the country for commercial property development. Canary Wharf is but one example of that. But that is an example of tinkering with the tax system, which was completely and utterly counter-productive and has had to be abolished by the Chancellor who introduced it. Some kind of self-denying ordinance must unfortunately be adopted by future Chancellors if they are not to make the hole into which the tax system has sunk deeper by their continuing digging.
	The real challenge is to find out how you make the system simpler, and what the mechanics are for achieving that. I suggest to the Minister that the Government adopt the approach that they have already successfully adopted with regard to regulations, with the Arculus Better Regulation Task Force, which has produced a very sensible way in which to reduce the number of regulations. In my view, having looked briefly at it, there are many cases in which you could simply take that report, delete the word "regulation" and insert the word "tax", and many of the procedures which David Arculus is proposing would work well to simplify the tax system. Some of them are pretty obvious but do not exist at the moment. He talks about setting targets and the need to have a bespoke unit within the relevant department—in this case it would be HM Revenue and Customs—whose job it would be solely to look at that area. He has a marvellous principle, which should be a guiding principle for tax simplification and for Chancellors, of one-in and one-out, whereby a Chancellor could not introduce any new tax measures without explaining which elements of the tax system he was going to repeal and simplify. Although it may be a strict discipline, for a number of years it would be extremely useful.
	Those are issues with which we shall have to grapple with greater urgency in the next Parliament. In the mean time, given the nature of the Bill—it is a useful move in the right direction—we, too, welcome it.

Lord Howe of Aberavon: My Lords, I creep into the gap with an apology for failing to record my interest in the Bill. For this biannual tryst between the noble Lord, Lord McIntosh, and myself to take place without my taking part would be like summer without sunshine. Perhaps I overstate it but it would be something pretty near. Although I have only four minutes in which to speak, perhaps there may be a degree of tolerance if I should trespass over those frontiers for a minute or two.
	I wish to add nothing to what the noble Lord, Lord McIntosh, said about the shape of the Bill and the way in which we have constructed it. All Front Bench speakers have perceived it as one further step along this long road. There is one more chunk on income tax to come and then a further Bill on which we are already working.
	I echo, underline and reinforce the thanks everyone has expressed to all those concerned with the management and preparation of these chunks of legislation. It is an arduous task. We owe a great debt of thanks to the people who do a lot of detailed work on the consultative committee and those who have a more strategic view on the steering committee. Perhaps I may single out for special benediction Adam Broke who was one of the godfathers of this exercise, himself having given a Hardman lecture about it before I did. He is the representative of the Special Committee of Tax Law Consultative Bodies on both our committees under the rewrite project.
	I pay tribute also to those in the project itself under the guidance of the relatively new leader, Robin Martin, who also serves on both committees and steers the ship both below and above the surface; and to those who have served on the Joint Committee as well as the other committees, in particular my right honourable and, in his proper place, learned friend, Kenneth Clarke, for his persistence in chairing the Joint Committee.
	Inevitably, my noble friend Lady Noakes has focused attention on the parallel growing need to look at the structure of existing tax policy which becomes increasingly exposed by the very tax law rewrite process that we are undertaking. Writing in British Tax Review, Maurice Parry-Wingfield said that the rewrite process cruelly exposes tax laws that are inconsistent, irrational or fundamentally complex. The longer we go on, the more obvious those shortcomings become.
	I am glad of the confident way in which the Minister commended our project. There has been some anxiety that the merging of Inland Revenue and Customs and Excise might lead to a diminution of the importance of the project. From the tone of his approach to the subject, I hope that we may be reassured in respect of that. Everyone wishes the project to go ahead. I hope that the Chancellor, whoever he may be after whatever election may take place in the next 12 months or so, will focus attention on this growing problem of addressing the need for simplicity in the tax system as a whole.
	Since we last debated one of these Bills, the Budd Committee for the Institute for Fiscal Studies has produced a further authoritative report addressing the need for a tax structure review project and for changes in parliamentary consideration of them. It is my hope—one should not say it too loudly—that this House will be enabled to play some perhaps growing part in this simplification process. The experience we are getting from Joint Committees in other fields, and from the work of the Economic Affairs Committee of the noble Lord, Lord Peston, shows that we have a useful part to play in this field. I hope that that may be reflected, whatever changes may come.
	My noble friend Lady Noakes drew attention to the topic which our own economics committee also studied: the impact of Schedule 22 of the Finance Act 2003 which almost completely rewrote a great chunk of our rewrite legislation. We have considered that carefully and deal with it in paragraphs 3.22 and 3.23 of our report for 2004–05. We said:
	"It is a difficult but very important issue . . . it is clearly highly desirable that (so far as possible) new legislation amending a Rewrite Act should emulate and match the quality of the original.
	"The project",
	that is the working team,
	"has revisited and strengthened its links with the Inland Revenue's Finance Bill co-ordination team, and with Parliamentary Counsel working on the Bill . . . It will be a priority in 2004–05 to keep this issue in front of us and to promote further discussion about how best to tackle it".
	We are constantly looking at it and I very much hope that the Chancellor of the Exchequer and those close to him will be doing the same.
	As has already been said, Bill No. 4, which will cover the rest of income tax, is now in a fairly advanced stage of preparation. Beyond that we must address corporation tax, which has been separated from income tax, and work is already taking place on that.
	We have discussed whether corporation tax or capital gains tax should form the subject of the next Bill but one. I am currently working on the premise that it should be corporation tax. But there may be some reason for reflecting again about that without wasting the work that has and is being done because corporation tax is itself the subject of so much consultation and consideration for reform at the present time. We may be anxious to avoid creating a Schedule 22 situation in respect of that. I am not now reversing our present policy and programme, but simply drawing attention to something that will need to be thought about.
	Finally, I wish to draw attention to another feature which is beginning to emerge from our day-to-day work: the extent to which we can, perhaps, help a little more in hastening the policy simplification process so that it can get going ahead of us, before we begin revising the legislation and the policies there.
	In my last point, perhaps I may quote from an item in the minutes of the most recent meeting of our steering committee, the 47th—we have been at it a long time—which was held on 23 February this year. Paragraph 11 states:
	"The Steering committee was in favour of the project carrying on with its core aim of rewriting the legislation and would not want this to be held up or obstructed".
	That carries the consent of everyone who has spoken. It continues:
	"However they also supported the idea of identifying complex areas and passing these on to policy colleagues at an early stage. It was suggested that the project should consider consulting specialists from outside the department at an early stage to identify areas that would benefit from simplification. The essential point would be to identify suitable topics sufficiently far ahead. The project should assume an outline plan for rewrite in the medium term, and topics could be identified and selected for simplification before the rewrite reached them".
	That was a tentative set of propositions following our discussion of a matter about which I know colleagues are concerned.
	Beyond that, I am sure that I have already doubled my time and I apologise with craven and abject gestures of every kind. I am most grateful to colleagues for the way in which they have welcomed this legislation and I rest my case.

Lord McIntosh of Haringey: My Lords, the apologies given by the noble and learned Lord, Lord Howe, are rejected with contumely. I refuse to accept that he does not have the right to speak for as long as he wishes, even if he forgot to put his name down.
	I am grateful to everyone who has spoken in this brief debate and for the unanimous support which has been given to the project as a whole and to the Bill in particular. I recognise the concerns that have been expressed and I shall comment on as many of them as I can.
	First, the noble Baroness, Lady Noakes, commented on the length of the Bill. It is certainly a long Bill. When it was put into my box to take home for the weekend, I took it out and refused to take it home—otherwise I would have had a three-box weekend, which I did not look forward to. Surely the issue is not the length of the Bill, but the length of the time that it takes to find what you need and to read and understand it. That is much more important than the weight of the Bill, which in effect was what the noble Baroness, Lady Noakes, was saying.
	The other point which is relevant is the length of time that is taken to fulfil this project. It was originally intended, in 1996, to be a five-year project. It has already been a nine-year project, and the noble and learned Lord, Lord Howe, was right to say that we are moving towards the next Bill on the core provisions of income tax, and after that to a Bill on corporation tax—and there is clearly more to come beyond that. He mentioned capital gains tax as a candidate. I fear that we may be painting the Forth Bridge here, but I do not think that there is necessarily anything wrong with that. That is what happens with Consolidation Bills. There is no reason why we should not be continuing to rewrite the tax code with all due speed, but with all due consideration as well, as demand appears for it. There clearly is demand from the people concerned with implementing tax law, and indeed paying taxes, that this project should continue.
	The noble Baroness, Lady Noakes, is right to point out that the Finance Act 2003 did rewrite the last Bill which was before Parliament—and, arguably, rewrote it in less felicitous and less clear language. I do not deny that. The reason is that a large part of that Finance Act had to deal with tax avoidance measures, which do not brook delay. If you let them go, you lose revenue on a very significant scale. The noble Baroness is right to say that we should think about how to get the philosophy of drafting which is in these tax rewrite Bills into tax legislation from the beginning.

Lord Howe of Aberavon: My Lords, perhaps the Minister will allow me to interrupt on that point. I failed to express thanks to the Parliamentary Counsel Office for the work that goes on regarding this, with particular reference to that kind of situation. In their words, such emergency drafting really is like tackling a moving coalface. It cannot be improved beyond a certain point. Yet everyone needs to go on trying and they, along with everyone else, deserve thanks.

Lord McIntosh of Haringey: My Lords, I am grateful for that confirmation of the point that I am in the course of making. If we take an example where it has been done properly, such as the implementation of pension scheme legislation in the Finance Act 2004, we can see the kind of conditions necessary for Finance Acts to live up to the standards of tax rewrite Bills, if I may put it that way. First, there has to be an identifiable, self-contained bloc of legislation; it cannot be mixed in with other things. Secondly, it has to be settled well in advance. Thirdly, there has to be adequate consultation. These conditions are simply not available during much of the construction of Finance Acts. That is the nature of the beast.
	The noble Baroness, Lady Noakes, gave the fundamental reason for that when she pointed to anti-avoidance legislation as being, in itself, a source of complexity. That was the very wise phrase that she used. Clearly, in dealing with attempts at avoidance, there has to be a quick response or you face the loss of revenue which is one of the three conditions, as I would describe them, under which you will get good tax law. The first condition is that it should provide certainty to everybody who has to use the tax law. The second is that it should maintain the competitiveness of the economy of the United Kingdom. The third is that it protects the Revenue from loss of revenue from those who would wish to find ways around it.
	The noble Baroness, Lady Noakes, concludes by saying that now is the time for a pause. I do not know whether she means that we should miss the Finance Act for a year—but I will agree to a pause provided she calls off her troops. By that I mean that those in the great accountancy and legal professions who seek to find ways round existing tax law—quite legitimately, for I am not accusing anybody of tax evasion—should cease doing so. If there is a pause there, then maybe there can be a pause in anti-avoidance measures.

Baroness Noakes: My Lords, I rise only to say that I rather resented them being described as my "troops".

Lord McIntosh of Haringey: My Lords, the noble Baroness, Lady Noakes, had a distinguished history in the accountancy profession before coming to this House—and has had while a Member of this House. I pay tribute to that and to the work of the accountancy profession in seeking to further the interests of its clients.
	The noble Lord, Lord Newby, has a proposal for simplification; that we should cut out tax incentives. I am surprised by that, coming from him. I would have thought that he, of all people, believed that taxation is a legitimate tool of government for promoting competitiveness, growth in the economy and social justice. All of those are achieved in many ways, but in tax law by providing incentives for things which we, as a country, want to encourage. Of course, if you fail to have incentives, you could have simpler tax law, but the wider concerns of society are expressed by providing incentives—and of course disincentives—for behaviour which we do not want to encourage.
	The noble Lord gave a useful analogy of the Better Regulation Task Force, whose report I have only just read. Some of the comments could well apply to the tax rewrite project. He drew attention to the synergy between the two very well.
	I was pleased to have the contribution of the noble and learned Lord, Lord Howe, to the debate. He certainly answered the question of whether the project is to continue by referring to the next report and the one after that. He raised the issue of whether the merger of the Inland Revenue and the Customs and Excise into Her Majesty's Revenue and Customs could lead to a diminution of the benefits of the project. I do not think so. I would have thought that the benefits of the merger are in providing a better service and a clearer source of tax provision from government to the users of the tax law and the payers of taxes. To that extent, I would have thought that the merger was complementary to the work of the tax rewrite project.
	I was grateful to hear from the noble and learned Lord the proceedings of the 47th meeting of the steering group. It is right that one of the keys to continuing improvement is the identification of topics for simplification and for the rewrite project far enough ahead for adequate consultation to take place.
	On all those grounds, I am justified in commending the Bill to the House. I repeat my thanks to all who have taken part in the project, not just to those who have taken part on a paid basis. I thank not only those in government and in Parliament, and parliamentary counsel, but also those who have been consulted, have given their time in responding and have improved the Bill as a result. I commend it to the House.
	On Question, Bill read a second time; Committee negatived.
	Then, Standing Order 47 having been dispensed with, Bill read a third time, and passed.

Open-Ended Investment Companies (Amendment) Regulations 2005

Lord McIntosh of Haringey: rose to move, That the draft regulations laid before the House on 10 February be approved [11th Report from the Joint Committee].

Lord McIntosh of Haringey: My Lords, I shall also speak to the draft Financial Services and Markets Act 2000 (Carrying on Regulated Activities By Way of Business) (Amendment) Order 2005.
	In November 2003, the then Financial Secretary to the Treasury announced the main strands of the two-year review of the Financial Services and Markets Act 2000—which hereinafter will be called FSMA—in a Statement to Parliament. The review was carried out in light of the Government's commitment to review the impact of FSMA on competition in financial services. This commitment was made in response to the March 2000 Cruickshank report on competition in UK banking. In addition, the Government took this opportunity to review certain components of the FSMA framework more generally, including the scope of FSMA in places.
	The review involved three main strands: first, an assessment by the Office of Fair Trading of the impact of FSMA on competition in financial services; secondly, changes to aspects of the Financial Services Authority's practices, and possible changes to the Financial Ombudsman Service; thirdly, changes in the boundary of regulation.
	In December 2004, the Financial Secretary to the Treasury announced the outcome of the review in a statement to Parliament. The outcome included plans by the Government to adopt a deregulatory package of reforms to improve the functioning of financial regulation. These would simplify certain regulatory requirements, redraw the boundary of regulation in a range of places where appropriate, and enable the FSA to operate more efficiently and effectively. The draft statutory instruments before us today will implement some of the reforms of this package.
	The draft Open-Ended Investment Companies (Amendment) Regulations 2005 have twice been put out for public consultation: once in February 2004, and then in January 2005. The draft regulations have received widespread support from the parties who expressed a view on them. The regulations will provide open-ended investment companies—or OEICs—with a range of freedoms to conduct their business more effectively and to compete on a more even basis with authorised unit trusts, which I shall not call "AUTs". These regulations will achieve this by removing certain costly regulatory requirements which provide limited investor protection, if any.
	For example, OEICs are currently required to hold annual general meetings, or AGMs. OEIC business usually reserved for AGMs covers matters such as presenting the OEIC's accounts and the reports of the directors and the auditors on the accounts; appointing or reappointing the OEIC's auditors, and viewing or re-electing the OEIC's directors with the exception of the OEIC's authorised corporate director, or ACD. Directors' service contracts can also be inspected at AGMs.
	However, AGMs are costly to organise. Holding an AGM costs between £5,000 and £10,000. Yet shareholders have shown little interest or inclination to attend them. Furthermore, some of the business which may be conducted by AGMs is not actually undertaken in practice, such as electing and re-electing directors. Consultation respondents explained that, in reality, almost all OEICs do not have any other directors apart from their authorised corporate director, whose appointment and conduct is not subject to consideration at AGMs.
	Other AGM business can be transacted in more cost-effective ways, without harming investor protection. For example, even though OEIC accounts are currently laid before an AGM, they are already issued to each OEIC shareholder separately. This makes the AGM business largely unnecessary. Directors' service contracts are currently available for inspection at AGMs, but these could be made available to shareholders at their request throughout the year instead.
	Dispensing with AGMs for OEICs should bring the OEIC regime more in line with that of authorised unit trusts. This will allow OEICs to compete on a fairer basis, since authorised unit trusts are not required to hold AGMs. The authorised unit trust's equivalent of an authorised corporate director appoints and reappoints its auditors. Similarly, these draft regulations propose that OEIC auditors and directors may be appointed and reappointed by their ACD.
	The regulations will also allow the FSA to regulate OEICs more efficiently, by easing certain requirements placed on the FSA. Currently, when the FSA decides to approve an OEIC proposal after having previously issued a warning notice proposing to refuse it, the FSA is required to issue a decision notice.
	However, decision notices are subject to more requirements than written notices under the FSMA. Consultation respondents felt that those additional requirements are not appropriate in the circumstances. For example, one of the additional requirements relates to the recipient's right to have his or her matter referred to the Financial Services and Markets Tribunal. Yet it is not clear why someone who has had their proposal approved would require that. The regulations therefore remove the requirement for the FSA to issue a decision notice in these circumstances and enable it to issue a written notice instead, for which the requirements are somewhat less onerous.
	Currently, the FSA must publish in the London or Edinburgh Gazettes notifications that the FSA has issued or received certain OEIC documents. That includes documents evidencing alterations in the OEIC's instrument of incorporation and documents setting out any changes in the address of the company's head office. If one of the reasons for publication in the Gazettes is to ensure that shareholders are notified of changes to the OEIC, other existing requirements in the OEIC regulations and in the FSA's rules should achieve that already. Publication in the Gazettes adds nothing.
	In summary, the regulations should lead to the regulation of OEICs becoming less onerous, without putting at risk investor protection, and to the FSMA framework continuing to facilitate competition.
	The second statutory instrument, the Financial Services and Markets Act 2000 (Carrying on Regulated Activities by Way of Business) (Amendment) Order 2005, has also been put out twice to public consultation in February 2004 and again in January 2005, and has received broad support from the parties who expressed views.
	The Myners review examined the factors distorting institutional investment decisions. That argued that existing regulation was one of those factors. In particular, in his November 2000 interim report, Paul Myners claimed that regulation at the time discriminated against investment by occupational pension fund trustees in relation to particular types of product. This discrimination in particular concerned private equity vis-à-vis quoted equities. The Government accepted that argument and made secondary legislation under FSMA to address it. However some concerns have remained that FSMA continues to discriminate in this way. The Treasury has also received several requests further to deregulate the investment activities carried out by pension fund trustees.
	The second statutory instrument addresses those concerns and the problems that stem from them—in particular, problems that the current legislative arrangements for occupational pensions trustees are causing trustees to take too narrow a range of investment decisions; invest in too narrow a range of products; and take too narrow a range of investment advice.
	Let me explain the current situation for unauthorised occupational pensions fund trustees who want to invest on behalf of a fund. Such trustees need to be authorised by the FSA, unless they delegate all routine or day-to-day decisions to an authorised fund manager. The order will refine the definition of decisions that unauthorised occupational pension fund trustees are not permitted to take. That should enable trustees to make a wider range of investment decisions.
	At present, it is thought that the combination of "routine" and "day to day" imposes tougher regulation on trustees than under the predecessor legislation that existed before FSMA. That referred only to day-to-day decisions. For example, choosing which annuity to buy is, according to the FSA, generally not a day-to-day decision, but could be regarded as a routine decision. That could lead trustees to make too narrow a range of investment decisions. The order therefore amends "routine or day to day decisions" to "day to day decisions" only.
	In addition, the Pensions Act 1995 allows trustees to make their own investment decisions, subject to certain conditions. Although trustees are not currently subject to formal legal requirements showing that they possess the knowledge and understanding to carry out their trustee duties, from April 2006, the Pensions Act 2004 will legally require trustees to hold more knowledge about investments. Allowing trustees under FSMA to make a wider range of investment decisions in the way provided for in the order will therefore be consistent with the Pensions Act 1995, while working in tandem with the changes which flow from the Pensions Act 2004.
	This order will also enable unauthorised occupational pension fund trustees to make a wider range of investments, especially in pooled investment vehicles and in contracts of insurance. Those products are useful investment options for many pension schemes. They generally involve similar or lower risks compared with investments in private equity limited partnerships, in which trustees can already invest. Moreover, allowing trustees to invest in those additional products, which carry similar or lower risks than the products in which trustees can already invest, is in line with the Government's and FSA's approach to favouring risk-based regulation.
	The order also enables trustees to "obtain and consider" advice rather than requiring them to "act in accordance" with it. Allowing trustees to invest only in accordance with advice may limit the ability of trustees to invest in a wider range of products, because many advisors tend to focus on particular products only.
	Since trustees are subject to a general duty of care, and are unlikely to ignore expert advice without good reason, I am confident that this change should not harm investor protection. If trustees are enabled to challenge advice, they may engage more in investment decisions and the quality of advice provided to them should improve.
	Finally, the order enables trustees to take advice from a wider range of sources, particularly from professional firms which operate under Part 20 of FSMA. These include actuarial, legal and accountancy firms.
	Part 20 of FSMA allows professionals to carry on certain regulated activities, which include providing advice to pension fund trustees, without being FSA-authorised.
	Since Part 20 of FSMA ensures that these professionals are supervised and regulated by their professional bodies, and are subject to the conditions set by Part 20 of FSMA, investor protection should not be harmed by allowing these firms to provide advice.
	This change should have the added benefit of increasing competition among investment advisors, thereby improving the cost and quality of advice provided to occupational pension fund trustees. This should contribute to improved investment performance.
	In conclusion, in order to ensure that the regulation of OEICs becomes more proportionate, that the FSMA framework continues to facilitate competition, and that the performance of occupational pension funds is enhanced, I commend the first of these regulations and this order to the House. I beg to move.
	Moved, That the draft regulations laid before the House on 10 February be approved [11th Report from the Joint Committee].—(Lord McIntosh of Haringey.)

Baroness Noakes: My Lords, I thank the Minister for his comprehensive introduction of the two orders before us. These are not fundamentally controversial orders and we shall not be opposing them. The orders are deregulatory but only really at the margins in the whole scheme of things. As far as we are concerned, any deregulation is better than no deregulation so we accept the crumbs that are being offered by these two orders.
	I will be commenting only on the FSMA order. I regret the language used in the title. Pretty well anybody other than a FSMA anorak who looked at the order would have absolutely no idea what it is about. It refers only to regulated activities but does not mention investment decisions by occupational pension fund trustees, which is the real object of the order. I am sure that the titling obeys some rigid rules set down by parliamentary counsel but I register a vain hope that orders should have titles that mean something.
	We remain disappointed that the Treasury's reviews of FSMA under Section 12 of the Act have been so narrowly drawn. The Treasury had flexibility under the Act to specify what was to be reviewed and it was sad, although predictable, that the reviews have really only tinkered at the margins. We continue to believe that the whole operation of the regime created by the Act should be subject to a more fundamental review. The FSA is a large and costly body and its impact on the competitiveness of our financial services industry and on the individual players within the industry should be looked at.
	Will the Minister say something about the Treasury's approach to reviewing the FSA and to the whole of FSMA? Are the reviews announced in November 2003 the beginning and end of the process? Is there any chance that the Treasury will go wider and require a more fundamental review? If the Treasury thinks that all is well with the FSA I suggest that it ventures east towards Canary Wharf and listens to City opinion.
	The relaxations which will give more freedoms to occupational pension scheme trustees are broadly welcome, but the Minister will be aware that we expect a lot from pension scheme trustees in terms of investment decisions. The order will place more responsibilities on trustees, for example, because they will no longer have to follow investment advice but must consider it and can then do something else.
	When these orders and regulations were considered last week in the Standing Committee on Delegated Legislation in another place, the Minister, Mr Stephen Timms, said:
	"A good deal of attention has been paid of late to how to ensure that trustees are equipped with the skills that they need to do their work and take important decisions".—[Official Report, Commons Eighth Standing Committee on Delegated Legislation, 15/3/05; col. 11.]
	Will the Minister say more about what that attention involves? How will the Government ensure that pension fund trustees are properly equipped to meet their onerous obligations? Are there any concrete plans to deal with the issue? I hope that the Government will agree that pension funds are too important and have been too damaged over the past eight years to leave matters to chance.

Lord Newby: My Lords, this legislation, particularly the regulations, relates to our previous debate. They seek to simplify the regime—particularly the OEICs regulations. When the FSA was established, it was hoped that it would regulate with a light touch. That hope was expressed relatively frequently by Ministers and those involved in establishing the authority. All the evidence that we have received shows that that has not happened. As the Explanatory Notes on the OEICs regulations point out,
	"OEICs are subject to regulatory requirements which are costly but which provide limited, if any, investor protection, and which might have an adverse impact on competition".
	That statement could be written about much of the operation of the regulatory functions of the FSA.
	Although we welcome those changes, they are the tip of the iceberg, as the noble Baroness said. It is interesting that those consulted on the proposed changes on the OEICs regulations said that they had not gone far enough. The Treasury has amended them further so that they are, according to the Explanatory Notes,
	"more proportionate and effective than had been originally proposed".
	The difficulty that the Treasury and the FSA have in deciding what is proportionate is depressing. One would have thought that, as they were amending the regulations, a good definition of proportionality might have been adopted from the start rather than requiring consultees to explain what it might be.
	I think that in the new Parliament there will be further pressure for a fundamental review of the FSA. In many ways, that is undesirable because the FSA is still relatively new and the kind of root-and-branch review proposed in some places would make it even more difficult for the FSA to do its job properly in the short term. However, unless as an institution it grasps the nettle of proportionality and operates with a light touch, calls for a fundamental review will become unanswerable and we will have to conduct one. We hope that the FSA might devote more of its attention to sorting out, by its own steam, a proportionate response to its many and various functions rather than having to be pulled up by the roots and have it done by external reviewers and then Parliament via another Bill. That must be a major challenge for it. These regulations and orders are barely the aperitif to such a procedure; we welcome them for what they are.

Lord McIntosh of Haringey: My Lords, I am grateful for the responses of both Front Benches to these amending regulations and orders—for what they are, as the noble Lord, Lord Newby, says. I acknowledge that they are very much at the margin of issues that are the responsibility of the Financial Services Authority and that you could certainly go a lot further than this amending legislation does in many aspects of the authority's work.
	I am interested and somewhat reassured by the difference in the views between the Conservative Party and the Liberal Democratic Party. The noble Baroness, Lady Noakes, is leading us towards a more fundamental review—what the noble Lord, Lord Newby, calls a root-and-branch review—of the Financial Services Authority, and indeed of FSMA itself.
	As one who played a lengthy part in the passage of the Financial Services and Markets Act through the House five years ago, I would certainly resist any attempt to revive primary legislation. I hope that the noble Baroness was not suggesting that. I think that she was talking about something less than primary legislation.
	I agree with the noble Lord, Lord Newby, that if we can avoid a fundamental root-and-branch review, which would bring into question a wide range of the FSA's activities, it would be desirable to do so. The FSA has been in operation for significantly less than five years, and now is not the time for a fundamental review.
	The noble Baroness, Lady Noakes, referred to the issue of the qualifications of pension fund trustees, and asked whether action was being taken. I referred briefly in my opening statement to the Pensions Act 2004, which happily she and I were not involved with. My noble friend Lady Hollis, who was involved, is in her place. She will confirm that a considerable and important part of the Pensions Act 2004 is concerned with the qualifications of pension fund trustees. The noble Baroness and I ought to inform ourselves more about that.
	I heard what the noble Lord, Lord Newby, said about proportionality. He questioned whether it was right to consult on what the City generally thought about proportionality rather than set out a standard of proportionality ourselves. I thought that that was what consultation was for. Proportionality could be such an inchoate concept that it was right for us to consult. I am grateful to those who responded to the consultation.
	I understand that we have general support for the detail of the regulations, and I commend them to the House.

On Question, Motion agreed to.

Financial Services and Markets Act 2000 (Carrying on Regulated Activities by Way of Business) (Amendment) Order 2005

Lord McIntosh of Haringey: My Lords, I beg to move the Motion standing in my name on the Order Paper.
	Moved, That the draft order laid before the House on 10 February be approved [10th Report from the Joint Committee].—(Lord McIntosh of Haringey.)

On Question, Motion agreed to.

Social Security (Contributions) (Re-rating and National Insurance Funds Payments) Order 2005

Lord McIntosh of Haringey: rose to move, That the draft order laid before the House on 1 February be approved [8th Report from the Joint Committee].

Lord McIntosh of Haringey: My Lords, I am pleased to introduce this order which deals with various national insurance contribution rates and thresholds. The provisions in the order are compatible with the European Convention on Human Rights. All the changes were announced at the time of the Pre-Budget Report.
	For the self-employed, it raises the small earnings exception below which, depending on their level of profits, they may claim exemption from paying Class 2 contributions. The exception will rise in April from £4,215 to £4,345 a year—an increase broadly in line with prices. Many people choose to pay these contributions in order to protect their benefit entitlement. The rate of Class 2 contributions for 2005-06 will rise to £2.10 a week, also in line with prices.
	Staying with the self-employed, the draft order also sets the profit limits between which main rate Class 4 contributions are paid, the lower limit at which contributions become due, and that the upper limit will increase broadly in line with inflation. The lower limit will rise in line with the income tax personal allowance from £4,745 to £4,895 a year. At the upper end of the scale, the upper profits limit will continue to match the upper earnings limit for employees, which will rise to £32,760 for 2005-06. This ensures that the self-employed pay main rate Class 4 contributions on much the same range of earnings as employees liable for Class 1 contributions and is an essential element in making the national insurance system fair for everyone.
	The draft order also deals with the weekly rate of voluntary Class 3 contributions which help those with insufficient contribution records in any given tax year to make up a qualifying year for benefit purposes. The rate of Class 3 contributions will rise in April by 20p to £7.35 per week, a standard re-rating in line with prices.
	The review of contribution rates is accompanied by a report from the Government Actuary detailing the effect of the draft order and the draft order uprating benefits laid by the Secretary of State for Work and Pensions on the National Insurance Fund. I am pleased to say that for the sixth year in a row, there is no expectation that the fund will need a Treasury grant. Nevertheless, a prudent provision of 2 per cent of all benefit expenditure is made.
	Northern Ireland has a separate national insurance scheme from Great Britain, but the two schemes are closely co-ordinated and maintain parity of contribution rates. This draft order covers both Great Britain and Northern Ireland. I beg to move.
	Moved, That the draft order laid before the House on 1 February be approved [8th Report from the Joint Committee].—(Lord McIntosh of Haringey.)

Baroness Noakes: My Lords, this order is part of the rhythm of the parliamentary year. In that sense it is not fundamentally controversial and we shall not oppose it. The Minister will be aware that the burden of national insurance is a key issue both for companies and individuals. My party is consulting on the thresholds for income tax and national insurance because we are concerned about the cumulative effect of indexation when earnings growth outstrips general inflation, as it usually does. The Chancellor rather likes fiscal drag and, indeed, at Starred Questions yesterday the Minister also seemed quite comfortable with the fact that more and more people are being dragged into the tax and national insurance net because earnings growth is higher than the indexation of the thresholds.
	An extra 4 million people are now paying tax and national insurance over 1997. They are often on the minimum wage or in part-time employment. According to the Bank of England, average earnings growth in the private sector excluding bonuses is currently running at around 4.3 per cent. This order uses indexation rates of between 2.4 and 3.3 per cent. Will the Minister say whether it is to remain government policy to suck more and more people into the tax and national insurance net in this way?
	The Minister will be aware that most commentators continue to believe that the Government have a black hole in their finances. Most commentators believe that the Government will have to raise taxes or national insurance, or both, in order to fill that black hole. I am well aware that the Chancellor still thinks that he can stick with his spending plans and meet the golden rule in both this and the next economic cycle without raising taxes or national insurance, so there is no need for the Minister to say it. I am prepared to enter this make-believe world with him. So will he give an assurance that the Government will not raise national insurance rates or remove the upper earnings limit in the next Parliament—of course, in the unfortunate event of the Government being re-elected?

Lord Oakeshott of Seagrove Bay: My Lords, we have no serious issues of principle with this order. When the Paymaster General introduced it in the other place, she said that she did not believe there would be much excitement in the committee proceedings that afternoon, and she was quite right. The Conservative spokesman assured the committee that he would not detain it overlong and then proceeded to waffle on for 12 minutes making not a single point of substance that I could see.
	I must say to the noble Baroness, Lady Noakes, that this is not the time or place to start reopening questions of the black hole or the budget deficit. I do not think that that is appropriate. We on these Benches do not feel that the order raises serious issues of principle. As she rather felicitously put it, it is part of the normal rhythm of the parliamentary year. I am happy for this House to approve it.

Lord McIntosh of Haringey: My Lords, I did not confide in anyone but I expected that response from the noble Baroness, Lady Noakes, and I was able to anticipate it. As I said at Starred Questions yesterday, we are rather pleased that earnings outstrip inflation. That is what it means when the economy grows stronger and people become better off. If she chooses to call that fiscal drag, that is fine by me.
	However, if the noble Baroness thinks that I am going to answer a question such as whether we are going to suck more people into the tax and national insurance net, and whether we are going to raise national insurance and the upper earnings limit in the course of the next Parliament, she will not simply receive the answer that such announcements are made by the Chancellor in his Budget and are occasionally for consultation in the Pre-Budget Report; she will also receive the answer that that is going to happen on not just one occasion but the answers will be given over the course of the next Parliament. For part of that time, at any rate, Gordon Brown will be the Chancellor who is going to make those announcements, and I am not going to make them.
	So I agree with the noble Lord, Lord Oakeshott, that this is not the time. My understanding is that the order is acceptable to the House and I commend it to the House.

On Question, Motion agreed to.

Child Trust Funds (Appeals) Regulations 2005

Baroness Hollis of Heigham: rose to move, That the draft regulations laid before the House on 9 February be approved [9th Report from the Joint Committee].

Baroness Hollis of Heigham: My Lords, in moving the Motion, I shall speak also to the Child Trust Funds (Appeals) (Northern Ireland) Regulations 2005 and the Social Security Commissioners (Procedure) (Child Trust Funds) Regulations 2005.
	I had a long speech prepared, but I consulted the noble Baroness, Lady Noakes, and she recommended a short one; so I have produced a short one. Although I will be as brief as I can, I shall obviously seek to answer any detailed questions on the regulations. Given that they have already been debated in the other place, I imagine that we have all read the record of the proceedings there and that many of our questions have already been answered.
	The child trust fund scheme will begin in April and will be administered by the Inland Revenue. Child trust fund appeals will follow the temporary arrangements for tax credits and will be heard by appeal tribunals which hear social security appeals. There will be a further right of appeal to the social security commissioners. These arrangements will continue until the planned reform of the tax commissioners. The regulations will cease to have effect when an order is made under Section 24(1) of the Child Trust Funds Act 2004.
	The first draft statutory instrument makes regulations for procedures for appeal tribunals in Great Britain. The second mirrors these arrangements for Northern Ireland and comes before this House because child trust funds are an excepted matter under the Northern Ireland Act. The final draft instrument provides for the procedures for the social security commissioners.
	The first and third sets of regulations are made under powers in the Social Security Act 1998, and the second set under the corresponding Social Security (Northern Ireland) Order 1998. The Act and order have been applied and modified by the Child Trust Funds (Non-tax Appeals) Regulations 2005, made on 3 February. Together they make provision for administering and deciding child trust fund appeals.
	Regulation 5 prescribes that only the personal representative of an individual, apart from the board, who has died may proceed with an appeal. This regulation does not apply where the appellant is an account provider as this will be a financial institution. Regulation 6 sets out the composition of an appeal tribunal hearing child trust fund cases. Most cases will be heard by a single legally qualified panel member. Cases raising complex financial issues may be heard by a legal and a financial panel member.
	Regulations 7 to 11 and 13 to 25 deal with procedures and broadly mirror the provisions of the main Social Security and Child Support (Decisions and Appeals) Regulations 1999.
	Regulation 12 is similar to Regulation 44 of the main appeal regulations. It goes a little wider to provide for the whereabouts of the child or relevant person to be kept confidential where requested and, interestingly, includes a child for whom a local authority has parental responsibility.
	The Social Security Commissioners (Procedure) (Child Trust Funds) Regulations 2005 largely mirror the existing Social Security Commissioners (Procedure) Regulations 1999. The main differences in this set of regulations relate to the omission of benefit-related references which are not applicable to child trust funds and the procedure to be followed in dealing with penalty appeals. Appeals involving penalties are not subject to the requirement to obtain leave to appeal to the commissioners.
	Regulation 13(1) prescribes the time limit for giving notice of appeal to the commissioners on a penalty. This is within one month of the decision of the appeal tribunal being sent to the applicant. In all other cases, it is within one month of the appellant being sent written notice that leave to appeal has been granted.
	Regulations 20 and 21 relate to procedures concerning oral hearings. Regulation 20(2) requires a commissioner to hold an oral hearing where a party appealing against the imposition of a penalty requests one. Regulation 21(6) prescribes the list of those who are entitled to attend the hearing and be heard. In addition, where the case involves a penalty appeal, Regulation 21(9)(a) provides that the leave of the commissioner is not required where the person on whom the penalty has been imposed wishes to give evidence, call or question witnesses.
	Although I have indicated the scope of the regulations your Lordships may wish to raise wider issues, either for information or to have them recorded in Hansard, about both the trust fund and the appeal system more generally. If so, I shall do my best to answer them. Equally, if your Lordships have any detailed questions about any particular regulation I shall be happy to enlarge on what I have said. I have been as brief as I can be consistent with the list of regulations.
	I am satisfied that the regulations are compatible with the European Convention on Human Rights. I commend them to the House.
	Moved, That the draft regulations laid before the House on 9 February be approved [9th report from the Joint Committee].—(Baroness Hollis of Heigham.)

Baroness Noakes: My Lords, I thank the Minister for introducing these rather complex orders. In particular, I thank her for using the shorter version of her speech.
	The regulations are only a part of the rather complex schemes of appeals for child trust funds. The Child Trust Fund Bill itself was considerably shorter than these regulations. It is indicative of the way in which we now have apparently modest legislation followed by great rafts of regulations.
	The Explanatory Notes refer to other orders which are required to complete the picture for these appeals—namely, some non-tax appeals regulations to be issued by the Treasury and two sets of regulations for child trust fund tax appeals. I have not seen those draft regulations and I wonder whether the Minister will explain the status of them. I am assuming—although I have not checked—that those regulations are subject only to the negative resolution procedure. If that is correct, I shall merely remark that it is rather unsatisfactory that we should not get the opportunity to debate together the whole picture of child trust fund appeals.
	In addition, I understand that the scheme of appeals is to be only temporary until a new system of tax tribunals has been set up. Can the Minister say when this will take place and what steps are required to reach that position? Is there a settled policy on this? What is holding-up the tax tribunals and therefore requiring this two-stage process for child trust fund appeals in an area which is already rather complex?
	When the Minister responds, will she explain the difference between a tax appeal and a non-tax appeal? What kind of appeals are we talking about in each case? Will they involve individuals or will they involve the providers of CTFs?
	Will she also say something about the number of appeals of each variety that are expected to be made each year? The Explanatory Notes are silent on anything practical about the impact of these regulations. Rather illogically, they append the regulatory impact assessment for the child trust fund scheme itself. Will the Minister say something about the costs that will fall on public funds for the appeals schemes for CTFs and what kinds of costs an individual will have to bear if he wishes to go through the appeals process?
	I am well aware that child trust funds are not within the Minister's responsibilities, but it is difficult to let the opportunity go past without saying a little about child trust funds and their development since the Act that was passed last year. The Minister will probably be aware that we have always regarded the child trust fund project as a gigantic and expensive electoral gimmick which will do little to reverse the disastrous slump in the savings ratio which has occurred since 1997.
	I do not know whether the Minister is aware of the survey published today by the Association of Investment Trust Companies. There is some good news for the Government in that 76 per cent of eligible parents are aware of the election gimmick. However, the Minister should also be aware that 17 per cent of parents of children who are ineligible think that they, too, will be receiving vouchers. So there might be rather a lot of disappointed voters around.
	The most interesting aspect of the survey was that most parents intend to put the money into a bank or building society and that fewer than 10 per cent will invest in the stock market. The Government have consistently said that they expect stock market-based products to be used to gain higher returns. They went to great lengths in the Act to ensure that stakeholder products were the centrepiece of the policy. The Government have clearly failed thus far. What plans, if any, do they have to turn this around, or will they simply be content that the Chancellor's millions of pounds of giveaway will be sitting in deposit accounts?

Lord Oakeshott of Seagrove Bay: My Lords, we on these Benches did not support the establishment of child trust funds, because we felt there were far better uses for taxpayers' money. But now that the Bill has become an Act, we support any measures that make the procedure work smoothly and fairly. These regulations seem to come within that category.
	More generally, on how providers seem to be lining up, and following the point of the noble Baroness, Lady Noakes, that it looks as though people's exposure to equities may be relatively low—although they are in many ways a natural investment for very young people with an 18-year view—I ask the Minister to consider, and perhaps pass on to the relevant people, the importance of trying to get National Savings more involved. It could be involved with child trust funds and could help later with pension funds. We should look seriously at launching a very low-cost equity index product which could be the base of equity exposure in these funds. We are missing a trick by not using the strong National Savings brand to produce really low-cost products. A good way of starting would be to make something available in the child trust fund procedure.
	In general, we support these tidying-up regulations.

Baroness Hollis of Heigham: My Lords, I am grateful for the response of the noble Lord and the noble Baroness. These are, as they suspected, technical amendments, and they are benign. As for reopening questions about the child trust fund, I do not particularly want to involve issues of policy.
	On the status of the non-tax orders, the noble Baroness is exactly right: they are subject to the negative procedure. The more substantive question was that of the structure of the new appeals system. I may have misunderstood what the noble Baroness was seeking to find out, but let me try to describe what is happening at the moment.
	The current jurisdictions and structures for the general and special commissioners are set out in primary legislation. Therefore, the reform of the tax tribunals can take place only after further primary legislation.
	As a result of the Queen's Speech, the Department for Constitutional Affairs, which administers the system, has permission to draft a courts and tribunals Bill. Under current plans, the new tribunal service, with the existing tribunals that currently come under the DCA or the Lord Chancellor's Department, will be operational from April 2006, while implementation of planned reforms under the proposed Bill, including any relating to the tax tribunals, and the bringing over of other appeals tribunals, will happen through the Leggatt process over the next two years. It is a perfectly sensible incremental strategy that we are starting with the existing tribunals under what was the Lord Chancellor's Department, and bringing over those that are under the Department for Work and Pensions. The DWP has the bulk of appeals tribunals, because it has all the social security appeals.
	The noble Baroness asked me what numbers we were talking about. This might be of interest to her. I was doing a quick count, and there are approximately 300,000 appeals a year, excluding employment tribunals. Of these, nearly 200,000 are associated with the DWP, and many of those are disability benefits, and so on. We expect the child trust fund appeals to be of the order of maybe 100 a year. That is why there is no regulatory impact assessment, except to say that the cost is negligible.
	What is interesting, and we do not yet know the answer, is whether the 100 is a correct figure and what it may be based on. I assume that, apart from difficult issues such as those associated with the death of a child, where there is some contest, a likely situation is where the child trust fund follows the child benefit, and there is a dispute between two parents who may have separated and, both having claims to child benefit, both then lay claim to the child trust fund.
	Vouchers, which can be drawn down on to the different forms of providers, whether building societies, banks, stakeholder funds or whatever, have been in place since January. That is only two months, but, so far, there been no suggestion of a single appeal, or to whom it should go, so 100 may be an overestimate.
	Finally, the noble Baroness made some broader points about supporting the increase in savings and the collapse of the savings ratio in this country. I am sorry, but I did some work on this—I suspect this might be of interest to the noble Lord, Lord Oakeshott—and the countries among the G8 with the highest savings ratios at the moment, running between 10 and 11 per cent, are Germany and Italy, and they have the lowest wealth and income per head of around $40,000, as indicated by GDP. The UK has a savings ratio of around 5.6 per cent and a wealth income of around $46,000 to $48,000 per head. GDP per individual is the only one we have. The US has a savings ratio of 1.5 per cent and a wealth per head of $55,000.
	That shows that the savings ratio is no reliable indicator of the wealth per head of the country. Moreover, given that the savings ratio does not include housing wealth, and that it is simply the difference between the denominator and the numerator of pensions—the difference between savings paid in for pensions and pensions taken out—it does not indicate anything except rainy-day contingency funds. I am sure I have told the noble Baroness nothing she does not already know, and I wish the Benches opposite would get off this savings ratio hook, as if it indicates something profound about what is happening in this country.
	Having said that, the Government have done well in redistributing income, in the sense of bringing the poorest up. When we came into office, a child on income support would have had from the current Government an income through income support of just under £17 a week. Had that been RPI'd in today's terms, it would be worth about £23 a week. It is actually now more than £50 a week and has more than doubled in real terms. So we have made a significant contribution to attacking child poverty as reflected in income. However, there are real problems in the distribution of wealth and this, though only a modest gesture, goes some way towards meeting those problems.
	More than a quarter, or 28 per cent, of UK households, have no savings at all. Of households earning less than £300 a week, more than 40 per cent have no savings at all. If to that £250, or £500 if the child is on an income-related benefit, the parents were able to put away the child benefit for that child—it is probably not likely in most cases, but let us imagine that they could—that child at 18 would have a fund, whether in cash or equities, depending on the assumptions you make of growth, of something between £20,000 and £25,000. That is a substantial sum. And that is without the addition of possible additions at seven and, perhaps, possible additions at secondary age.
	In the same way as we are trying to ensure that the poorest children have seen a real increase in their income, so we are trying to ensure that the poorer children also go into adulthood with a modest capital endowment from the Government on behalf of us all. If the parents and any other members of the family are able to contribute, there will be a more substantial one, which will free those children to make the sort of choices—to go to university and so on—which children from more affluent households can more or less take for granted.
	Finally, the noble Lord, Lord Oakeshott, made a point with which I am entirely sympathetic, which is to use national savings as a vehicle. I believe that that vehicle has great trust in the country, and I should like it to come in a variety of forms—in pensions for women, through to the child trust fund. I shall try to find out whether we expect national savings to be a player. But one possibility for stakeholder funds, with their 1.5 per cent cap, that may go some way to meeting a concern that I share, is that there may be a degree of lifestyling, if I can use that phrase. When the child is 14 or 15 years old, you could move the money out of equities into a safer bond, gilt or cash-linked account, so that there is no possibility of a plunge in its value before the child is able to draw down that money at 18 for university, college or whatever else seems appropriate.
	I hope that I have answered the questions and that I have had a swipe at the false play on the savings ratio figures. I do not doubt that if I have not persuaded the noble Baroness, Lady Noakes, on that point, we shall revisit it in future.

On Question, Motion agreed to.

Child Trust Funds (Appeals) (Northern Ireland) Regulations 2005

Baroness Hollis of Heigham: My Lords, I have already spoken to these regulations. I beg to move.

Moved, That the draft regulations laid before the House on 9 February be approved.—(Baroness Hollis of Heigham.)
	On Question, Motion agreed to.

Social Security Commissioners (Procedure) (Child Trust Funds) Regulations 2005

Baroness Hollis of Heigham: My Lords, I have already spoken to these regulations. I beg to move.
	Moved, That the draft regulations laid before the House on 9 February be approved [9th Report from the Joint Committee].—(Baroness Hollis of Heigham.)

On Question, Motion agreed to.
	House adjourned at twenty-four minutes past nine o'clock.